The Leverage Gap: Washington Dismisses Ottawa's Trade Concessions
AI-generated image · Bay Street Wire
U.S. Trade Representative Jamieson Greer signals that rolling back previous policies won't earn Canada credit as CUSMA negotiations remain stalled.
For months, Ottawa has attempted to grease the wheels of diplomacy with a series of strategic retreats. But according to the United States' top trade official, those gestures are being viewed in Washington not as bargaining chips, but as basic housekeeping.
**What Happened**
During the Aspen Security Forum in Washington on Wednesday, U.S. Trade Representative Jamieson Greer made it clear that the Trump administration is not granting Canada credit for recent policy reversals. Specifically, Greer referenced Prime Minister Mark Carney's decision last June to drop a digital services tax—which would have taxed revenues from tech giants—and the subsequent move to roll back the Online Streaming Act.
Regarding the Online Streaming Act, Ottawa had directed the CRTC in June to reconsider a decision that would have tripled the financial contributions streamers make toward Canadian content, following pushback from U.S. Ambassador to Canada Pete Hoekstra and American interest groups.
Greer's assessment was blunt: Canada does not get credit for "doing something bad and then undoing it," characterizing the reversals as "just good practice" on Canada's part.
**What It Means**
Ottawa is entering a high-stakes trade conflict with virtually zero leverage because it is operating from an outdated playbook of incremental concessions. While Canada and Mexico both sought a 16-year extension of the Canada-U.S.-Mexico-Agreement (CUSMA), the U.S. formally announced at the start of July that it is not renewing the deal.
While CUSMA remains in place under annual rolling reviews for up to a decade, the lack of a formal extension has left Canadian industries—specifically cabinetry, automobiles, aluminum, and steel—exposed to sector-specific duties.
reporting from CityNews Toronto highlights a stark divergence in how Washington is treating its North American partners. While the U.S. and Mexico have already launched formal CUSMA negotiations—with Greer describing the Mexicans as "pragmatic" despite challenges regarding subsidies, monetary policy, and overcapacity—no such talks have begun with Ottawa.
Furthermore, Greer noted that President Donald Trump remains focused on lowering the trade deficit with Canada, a figure driven largely by oil imports. Greer also reiterated a Trump administration talking point, claiming that Canada and China were the only nations to retaliate after the president imposed sweeping tariffs.
**The Bottom Line**
The diplomatic thaw reported earlier this year, characterized by weekly contact between Greer and Canadian officials, has not translated into tangible progress. Greer noted that while he has offered proposals to put the U.S. in a "better position," he has not seen "a lot of movement" from Canada.
With the technical level of negotiations stalled, Greer indicated that the only path forward is a top-down resolution. He suggested that if President Trump and Prime Minister Carney can reach a personal understanding, an agreement could be reached, noting simply, "We’re always going to trade some with Canada, just because they’re there."