Chuck Grassley, senior Republican senator from Iowa, told reporters at the Iowa State Fair that President Donald Trump is using the threat of new tariffs as a lever to force Canada to change its trade practices.
Grassley warns of tariff impact
The administration has signed an executive order that would impose 50 percent duties on a broad range of Canadian products beginning 19 August. The move is presented as retaliation for provincial bans on U.S. liquor, Canada's supply managed dairy system and quotas on certain U.S. vehicles.
Grassley, a long‑time supporter of free trade, said there is nothing wrong with tough negotiations but cautioned that they must not be used to dismantle the trilateral agreement known as CUSMA. "These negotiations cannot be used as a way of destroying CUSMA," he said.
Canada seeks to keep CUSMA alive
Canada's trade minister Dominic LeBlanc and chief negotiator Janice Charette are in Washington to continue talks as the deadline approaches. Both have stressed the importance of preserving the agreement, which underpins roughly three‑quarters of Canada's export market.
Jamieson Greer, U.S. Trade Representative, described the discussions as constructive but offered no indication that a settlement will be reached before the duties take effect. Unlike most of Trump's other tariffs, the new duties contain no exemptions for goods that comply with CUSMA.
The agreement, which replaced NAFTA during the first Trump administration, runs for 16 years and enters a rolling review that will continue for a decade. Trump has repeatedly called the pact "irrelevant" and signalled he may not support an extension.
Analysts note that a breakdown in talks could hit Canadian dairy producers, lumber exporters and auto manufacturers, all of which rely heavily on the United States. A 50 percent tariff would raise costs for downstream industries and could prompt price increases for Canadian consumers.
While the United States and Mexico have already begun formal CUSMA renegotiations, Ottawa has not yet entered a comparable process with Washington. Grassley reiterated his belief that the United States and Canada should maintain friendly relations and that CUSMA should continue unchanged.
The outcome of the remaining negotiations will shape the trade landscape for the next decade and will be watched closely by businesses that depend on cross‑border supply chains.
Based on reporting by Global News.