Trump trade representative targets Canadian beer, dairy rules in new CUSMA review conditions

U.S. President Donald Trump’s trade spokesman laid out a series of conditions Wednesday that Canada must meet in order to extend the Canada-United States-Mexico Agreement (CUSMA) when it is reviewed next year – revealing publicly for the first time what the administration expects from Prime Minister Mark Carney to maintain the agreement long-term.

U.S. Trade Representative Jamieson Greer told Congress that CUSMA has been “successful to some extent” but that changes must be made before Trump agrees to extend it for another 16 years or return to annual reviews, something Canada wants to avoid given the resulting annual uncertainty.

“I don’t think we can say that USMCA is an unqualified success,” Greer said in his remarks, which were shared publicly after his closed-door meeting with lawmakers at the Capitol.

While Greer said the deal has boosted U.S. exports to Canada and Mexico — they are up 56% since 2020, according to his figures — “the gaps are such that automatic approval of the deal is not in the national interest.”

Greer said his office “will keep the president’s options open, negotiating firmly to resolve identified issues, but only recommending renewal if a resolution can be found.”

This rhetoric departs from Trump’s past characterizations of the trilateral trade deal he negotiated during his first term. At the time, the president called CUSMA “the best deal we’ve ever done.”

“Market access” for US dairy products

Greer said the U.S. would tackle two major Canadian policies: the online streaming law, which made online platforms like Netflix, Spotify and YouTube subject to Canadian broadcasting rules, and the dairy sector subject to supply management, among others.

Greer said that for the CUSMA review to succeed, Canada must strengthen “market access for U.S. dairy products” and address “Canadian exports of certain dairy products,” an apparent reference to allegations that the Canadian sector sells dairy ingredients at low prices, undercutting U.S. producers.

While he stopped short of calling for the complete dismantling of supply management – ​​which Canada has repeatedly highlighted as a failure – he told Congress that Canada had policies that “unfairly restrict market access” and needed to be addressed.

Canada allows trade in some U.S. dairy products without tariffs, but there is a limit — and U.S. suppliers have never reached it. The American dairy lobby nevertheless wants these rules to be relaxed somewhat.

Greer also said that the Trudeau-era streaming legislation “discriminates against American technology and media companies” and that there needs to be some sort of review of that policy, although he was not prescriptive in his remarks.

The law was passed to force U.S. web giants to contribute financially to the national media ecosystem and make Canadian content easily accessible on their platforms, which have become ubiquitous as traditional television, cable and satellite providers have lost subscribers.

Boycott hits liquor giant

Greer also wants Canada to address “provincial bans on the distribution of alcoholic beverages in the United States,” which are a form of protest against Trump’s aggressive tariff measures on key sectors like steel, aluminum, automobiles and lumber.

These alcohol boycotts had a considerable impact. American spirits giant Brown-Forman, maker of Jack Daniel’s, saw its Canadian sales fall by more than 60 percent.

The ban has attracted the attention of U.S. officials at the highest levels. Pete Hoekstra, the U.S. ambassador to Canada, has previously said that these provincial alcohol restrictions — and the massive decline in Canadian tourism to the United States — are “why the president and some members of his team have called Canada nasty and mean to deal with, right, because of some of these measures.”

Ontario Premier Doug Ford, meanwhile, was firm, saying he would keep American brands out of the LCBO until there was a tariff relief deal – or a renegotiated CUSMA was in place. “If they don’t do it, then they won’t have alcohol on our shelves,” he said recently.

Greer’s document says nothing about lifting the so-called Section 232 tariffs that Trump imposed on critical Canadian sectors. Bilateral negotiations to lift them failed earlier this year when Trump erupted over Ford’s anti-tariff ads featuring Ronald Reagan.

Greer, however, highlighted concessions Carney has made to Trump so far as part of a campaign to secure some tariff relief, including eliminating Canada’s digital services tax and reducing retaliatory tariffs.

As part of the CUSMA review, Greer said the Trump administration is also demanding that Canada address “discriminatory procurement measures” in Ontario, Quebec and British Columbia and the “complicated customs registration” that some Canadian companies must comply with when receiving U.S. exports.

Finally, Greer said Alberta needs to review its “unfair treatment of electricity distribution providers in Montana.”

Another issue mentioned in Greer’s remarks – but not explicitly defined as a condition to be resolved to achieve renewal – is what he calls “regulatory imbalances with Canadian fishermen” in the “gray zone” near New Brunswick and Maine.

Tensions have long simmered between the two countries over lobster catches in this part of the Gulf of Maine, claimed by both Canada and the United States.

In a positive sign for Canada, Greer acknowledged that the overwhelming consensus among North American business and unions who testified at a series of hearings on CUSMA last month is that the deal should continue in some form.

“Many have explicitly asked for the deal to be extended,” Greer said. “However, at the same time, virtually all stakeholders have also called for some sort of improvement to the agreement.”

Greer left open the possibility of separate bilateral agreements with Canada and Mexico, as opposed to an overarching trilateral pact like the one that currently exists – although he said some continent-wide issues, like rules of origin, critical minerals or alignment on economic security, would be better addressed collaboratively with all three partners.