USTR Greer says Canada has declined to complete trade agreement

US Trade Representative Jamieson Greer announced that Canada has declined to finalize a trade agreement, marking a significant rupture in what had been months of back-and-forth negotiations between the two largest trading partners on the continent.

Bilateral trade between the US and Canada exceeded $380 billion in the previous year, making this one of the most consequential commercial relationships on the planet to leave hanging without a completed deal.

How it got here

The roots of this breakdown trace back to July 1, 2026, when the US opted not to renew the CUSMA agreement (the Canadian name for what Americans call the USMCA) for another 16-year term. Instead, Washington triggered a mechanism that initiates rolling annual reviews, keeping the agreement technically alive until at least 2036 unless one side formally withdraws.

Following that decision, negotiators from both countries pursued a potential bilateral deal through the summer. Greer and Canadian Trade Minister Dominic LeBlanc worked on documentation designed to resolve persistent trade irritants between the two economies.

President Trump paused planned 50% tariffs on roughly $20 billion in Canadian goods to give those discussions room to breathe.

Greer had previously expressed satisfaction with progress in the talks while acknowledging persistent gaps.

What the US wanted

The American side came to the table with a specific wish list. Stricter rules of origin topped the agenda, a mechanism that determines how much of a product must be made within North America to qualify for preferential tariff treatment.

Washington also pushed for greater access to Canada’s dairy market. Trade deficit concerns featured prominently as well, particularly in agriculture and digital trade. The US has also voiced worries about Canada serving as a backdoor for Chinese investments into North America.

Canada rolled back its controversial Digital Services Tax, a levy that had irritated American tech companies and trade officials alike. But according to Greer, that move hasn’t earned Canada much credit at the negotiating table.

The USMCA’s complicated history

The USMCA replaced the 1994 NAFTA agreement and took effect in 2020. It was itself the product of contentious negotiations during Trump’s first term, when he threatened to tear up NAFTA entirely if Canada and Mexico didn’t agree to updated terms.

The deal included a sunset clause requiring the three parties to jointly decide on renewal at the six-year mark. That clock expired on July 1, 2026, and the US chose not to lock in for another extended period.

What comes next

The pause on those 50% tariffs covering $20 billion in Canadian goods was always temporary. With Greer now publicly stating that Canada has declined to complete the deal, the political cover for maintaining that pause gets thinner by the day.

The rolling review mechanism means the existing USMCA framework doesn’t vanish overnight. But it does mean that every year brings a fresh opportunity for either side to escalate tensions or extract concessions, turning what was designed as a stable trilateral framework into something that more closely resembles a series of annual negotiations.

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