U.S. Commerce Secretary Howard Lutnick has brushed off concerns about the end of free trade between the U.S. and Canada, labeling such speculation as “silly.” He emphasized that a significant portion of Canadian goods enter the U.S. without tariffs under the existing North American free trade agreement.
During an interview on CBS’s “Face the Nation,” Lutnick highlighted the United States-Mexico-Canada Agreement (USMCA), stating that nearly 75% of goods from Mexico and Canada currently arrive in the U.S. without tariffs. While acknowledging this, he maintained that tariffs on Canadian imports would remain in place until Canada reciprocates by opening its market to American goods.
These remarks from the commerce secretary follow comments from Prime Minister Mark Carney, who expressed skepticism about the likelihood of a tariff-free deal with the U.S. Lutnick echoed the sentiment that Canada needs to make its market more accessible to U.S. products to avoid tariffs.
Recent data shows that around 79% of U.S. imports from Canada were duty-free in January 2025, a figure that increased to about 89% by April of the same year. Lutnick emphasized the need for balanced trade relationships, stating that President Trump aims to rectify what he views as unfair trade practices that have persisted for decades.
Looking ahead, Lutnick mentioned potential renegotiations of the USMCA in the future to safeguard American jobs and industries. While the official renegotiation timeline is set for 2026, there are calls from various stakeholders to initiate talks sooner for economic stability.
Meanwhile, ongoing discussions between Canadian and U.S. officials aim to avoid potential tariffs on Canadian goods threatened by President Trump. The White House is emphasizing the importance of reciprocal trade policies, suggesting that countries that maintain trade barriers could face tariffs.
Trump’s recent tariff threat was linked to concerns about fentanyl trafficking and disagreements over Canada’s dairy tariffs. Despite these challenges, the U.S. dairy industry claims that they have not exceeded agreed-upon quotas under the USMCA due to what they perceive as protectionist measures by Canada. Despite pressure, the Canadian government remains committed to maintaining its supply management system.
Negotiations between Canada and the U.S. continue amid uncertainties about the future of trade agreements, with discussions ongoing to avoid escalating trade tensions.