USMCA Development – Canadian Prime Minister will Announce New Advisory Council for USMCA/CUSMA Negotiations

Canadian government is still under the belief they can negotiate themselves into a position where their status within the USMCA (CUSMA) will be retained

According to the latest media reports, Prime Minister Mark Carney is set to announce a new Canadian Trade Advisory Council that will strategize the best moves within each sector of the Canadian economy to deal with the United States USMCA renegotiations. Even at this latest date, the Canadian government is still under the belief they can negotiate themselves into a position where their status within the USMCA (CUSMA) will be retained.

Simultaneous to this announcement, the one best hope the Canadians have relied upon is also evaporating. However, before discussing that aspect, let’s first look at the advisory council.

CANADA – Prime Minister Mark Carney is expected to unveil a new advisory council focused on Canada-US trade relations as Ottawa attempts to salvage Canadian-US trade amidst Donald Trump’s aggressive tariffs. According to reports, the council will bring together major business leaders, labour representatives and former politicians to advise the federal government ahead of the scheduled review of the Canada-United States-Mexico Agreement (CUSMA).

[…] While the entire list of figures present on the council has yet to be announced, the Government of Canada first announced the advisory committee in April 2026, and released a partial list of members. Members reportedly include Conservative leader Erin O’Toole, former Quebec premier Jean Charest, and other representatives from sectors such as energy, manufacturing and forestry. There are also multiple high-level Canadian executives present on the list released by the Prime Minister’s office on April 21. The committee will be chaired by Dominic LeBlanc, who currently serves as minister responsible for Canada-U.S. trade and intergovernmental affairs. According to the Prime Minister’s Office, the council’s role will be to provide strategic advice and industry expertise as Canada prepares for negotiations under the umbrella of Donald Trump’s renewed tariff threats.

An advisory panel to strategize retention of a system that will no longer exist

The creation of the council reflects growing anxiety in Ottawa regarding the future of Canada’s trade relationship with the United States. Since returning to office, Donald Trump has continuously threatened new tariffs on several major industries while pushing for tougher trade concessions from allies. Canadian sectors like steel, aluminum, automotive manufacturing and critical minerals have been most heavily impacted, while US lumber and alcohol sectors have seen massive hits due to retaliatory tariffs and restrictions from Canada. […] His government has increasingly promoted what it calls a “resilience strategy,” focused on strengthening partnerships with Europe and Asia while preparing for difficult negotiations with Washington over continental trade and supply chains. (read more)

An advisory panel to strategize retention of a system that will no longer exist.

I doubt you could define Canadian politics with a better example.

Here’s the background story that makes matters much, much worse for Canada.

The best card the Canadians have on the issue of this agreement comes from the possibility of leftists within the U.S. congress fighting against the Trump administration’s efforts to change or eliminate the USMCA. Carney, like Trudeau before him, is relying on anti-Trump support within congress.

In 2018 it was then House Speaker Nancy Pelosi who wedged Canada back into the trade negotiations by threatening to whip her members against the U.S-Mexico agreement unless President Trump and then U.S. Trade Representative Lighthizer permitted Canada to engage in the trade discussions and the elimination of NAFTA. Before that Pelosi intervention, Trump and Lighthizer were 80% of the way in eliminating NAFTA and creating a U.S-Mexico bilateral trade deal. Pelosi saved Trudeau’s position.

In 2026, Prime Minister Mark Carney is hoping for the same level of support from Democrats, except a recent announcement reflects his strategy doesn’t hold any merit.

Canadian carbon exchange rules and legislated regulations on climate change

Twenty U.S. Democrat Senators are asking U.S. Trade Representative Jamieson Greer to structurally get a lot tougher on the trade review and directly close the USMCA loophole that permits Canada to use China as the manufacturing center of their component goods.

Democrats, yes democrats, well understand that U.S. labor unions can see the fundamental flaw that exists as long as Canada cannot factually align with U.S. and Mexico manufacturing systems due to Canadian carbon exchange rules and legislated regulations on climate change. Democrats are asking Greer to get tough.

VIA NBC – A group of Democratic senators will issue a set of demands to U.S. Trade Representative ahead of a mandatory joint review of the U.S.-Mexico-Canada Agreement this summer.

In a letter led by Sen. Tammy Baldwin, D-Wis., and shared exclusively with CNBC before being sent later Wednesday, 15 Democrats wrote to Greer to “insist that any revised agreement must deliver meaningful and measurable gains for American workers.”

[…] The Democrats are demanding new provisions on the labor front of the agreement, asking that Greer use the review to “lift all boats by ensuring that both Canada and Mexico fully comply with their labor commitments.”

The letter writers targeted seven priorities they would like to see addressed in the review. First was business relocations to Mexico. They said the USMCA has fallen short on keeping businesses in the U.S., pointing to manufacturing wages in Mexico, which they say create a wage gap that is leading to offshoring.

Canada has purposefully and intentionally aligned itself with Chinese industrial manufacturing

[…] The Democrats also asked Greer to find new ways to enforce bans on goods created with forced labor, which they say all parties have failed to enforce.

[…] Addressing Chinese investment, which also came up as an issue during Trump’s recent trip to Beijing, is also among the Democrats’ demands. […] “It is critical to address this loophole in the review of the Agreement to prevent its use as a backdoor to the North American economy by third-party actors, particularly our adversaries,” they wrote. “Combatting China’s unfair trade practices will take global cooperation, and the review can present a model of how countries can work together to counter this threat.”

Another way the Democrats suggested countering China’s advance into the North American supply chain is by introducing new rules of origin requirements for additional sectors. China’s pervasiveness in components for manufactured goods like autos has recently become an issue in Washington. (read more)

Canada has purposefully and intentionally aligned itself with Chinese industrial manufacturing because Canada’s rules and regulations on climate change and carbon compliance restrict their own industrial manufacturing systems. Canada needs China to do the dirty jobs and create the component goods that can be assembled into Canadian products. Democrat in the Senate are asking USTR Greer to address this exact issue.

President Trump and USTR Greer can now leverage this bipartisan issue against the Canadian trade delegation. Canada’s hope of having the professional political left run cover for them no longer exists. This is a very significant development.

Structurally, without using China, Canada cannot comply with the USMCA without abandoning their net-zero carbon program

In the December 2024 meeting between Trudeau and Trump, the issue of NATO compliance was part of a larger discussion around trade imbalances, non-tariff barriers, intellectual property conflicts and legislative hurdles that Canada uses as a crutch to retain economic benefit without reciprocity.

Prime Minister Trudeau argued in Mar-a-Lago that Canada could not change all the points of conflict, drop their non-tariff barriers, comply with NATO demands and simultaneously get into total alignment with the USMCA trade compact (CUSMA to Canada), because their climate policies and legislated carbon payment system did not support or match the heavy industrial processing capabilities of both the United States and Mexico.

This factually correct and honest admission by Trudeau, an admission he would never say to his own constituents in Canada, triggered President Trump to respond with the 51st state, notation. Essentially, Trump saying, if you cannot be a hemispheric partner with equal capabilities; and if you need to retain structural economic dependency; then you, Canada, should just become a 51st state of the USA.

Think about the reality of the Canadian position. Structurally, without using China, Canada cannot comply with the USMCA without abandoning their net-zero carbon program. This requires legislative change and a complete 180° reversal in the climate-change mindset of the Canadian people. That is very unlikely to happen.

If Canada cannot factually align with the U.S. and Mexico, then how does Canada expect to retain a trilateral trade agreement?