Canada Urged to Plan for Tough USMCA Talks in 2026

Kevin Brady, Senior Consultant at Akin and former Chairman of the House Ways & Means Committee; Ken Smith Ramos, Partner at Agon and former Mexican Chief Negotiator for the USMCA, Office of the Secretariat of the Economy; Steve Verheul, Principal at GT&Co Executive Advisors and former Special Advisor for Trade Policy to Canada’s Deputy Minister of Finance discuss the USMCA, who negotiated the original USMCA, join Balance of Power.

Of all the trade negotiations President Donald Trump has started with major economies this year, US talks with Canada have been among the slowest to gain momentum.

Currently, discussions are stalled between the two countries sharing the longest land border. Prime Minister Mark Carney has struck a conciliatory tone with Trump for months in an effort to reach a deal to lower US tariffs on key sectors like autos, steel and aluminum.

Of all the trade negotiations President Donald Trump has started with major economies this year, US talks with Canada have been among the slowest to gain momentum.

Currently, discussions are stalled between the two countries sharing the longest land border. Prime Minister Mark Carney has struck a conciliatory tone with Trump for months in an effort to reach a deal to lower US tariffs on key sectors like autos, steel and aluminum.

Last week Carney did confirm that he plans to travel to Washington later this week for the 2026 World Cup draw, which will put him in the same room as Trump for the first time in about a month.

Recall that Trump suspended the talks on Oct. 23 after he was angered by an Ontario government ad featuring Ronald Reagan expressing his reservations about tariffs, and it’s hard to see a path back to the negotiating table anytime soon.

Canadians have little faith a trade accord with the US will be reached in the short run. Some 67% of them say it’s unlikely a deal to lower US duties will be achieved over the next six months, according to a poll in late-October by Nanos Research Group for Bloomberg News.

The distrust between Washington and Ottawa is only likely to worsen heading into 2026, presenting even more risks for Canada.

That’s the view of Barry Appleton, an international trade lawyer and dual US-Canadian citizen who has given testimony to governments and agencies on both sides of the border, including the US Trade Representative.

Among the biggest threats in early 2026, according to a Bloomberg interview with Appleton: that Trump will drop the bombshell of giving notice of a US withdrawal from the US-Mexico-Canada Agreement as a way of kicking off a scheduled review of the deal that took effect in 2020.

Such an announcement could effectively turn the scheduled trilateral review of USMCA into two bilateral brawls where Mexico and Canada — which accounted for a combined 30% of total US goods trade last year — have vastly less negotiating leverage than the White House.

“The Americans will ask for everything they possibly can because they’ve never had such a strong position that they’ve used,” Appleton said, adding that Canada needs to rethink its gameplan. “It requires smart strategy — real industrial policy and a foundational shift that it has not seen basically since the Second World War.”

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