Prime Minister Mark Carney pushed back Thursday against White House pressure over a provincial ban on American alcohol, calling US tariffs on Canadian steel, aluminum, automobiles, and forest products violations of the bilateral trade agreement — as President Donald Trump renewed claims the US subsidizes Canada and repeated calls for the country to become the 51st state.
Both governments are maneuvering ahead of a mid-2026 review of the Canada-United States-Mexico Agreement, with Washington demanding concessions before negotiations begin and Ottawa signaling it is prepared to wait.
Testifying before Congress on Wednesday, US Trade Representative Jamieson Greer said Washington wants “changes” to Canadian trade practices and put the provinces on notice that the administration is weighing “enforcement action” if American alcohol stays off shelves. The US is “at the end of our rope” on the issue, Greer said.
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Carney responded Thursday. “You know what’s an irritant? 50% tariffs on steel, 50% tariffs on aluminum, 25% tariffs on automobiles, all the tariffs on forest products,” he told reporters in Ottawa. “Those are more than irritants. Those are violations of our trade deal.”
The prime minister also said he had never heard of any “entry fee” required for Canada to enter CUSMA negotiations — a reference to a Radio-Canada report that the Americans are demanding concessions as a precondition for starting talks.
Read: Mark Carney Denies U.S. ‘Entry Fee’ Demand in CUSMA Trade Talks
On the same day, Trump posted on X claiming the US pays “hundreds of billions of dollars to SUBSIDIZE Canada” and that “without this massive subsidy, Canada ceases to exist as a viable Country” — repeating a claim economists have debunked.
The actual US goods and services trade deficit with Canada in 2024 was $35.7 billion; economists at the Peterson Institute for International Economics and Brookings Institution have said a trade deficit is not a subsidy. Trump again called for Canada to become “our Cherished 51st State.”
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In early 2025, Canadian provinces removed American beer, wine, and spirits from shelves as a retaliatory measure against Trump’s tariffs. Alberta and Saskatchewan have since reversed course, but Ontario Premier Doug Ford has held firm, saying American products will return to shelves only when the US lifts tariffs on Canadian goods.
Read: Ford Won’t Budge on US Alcohol Ban Until Tariffs Drop
Carney said the decision rests with the provinces, pointing to Ford as “the client” given his government’s control over the LCBO. He also claimed he had warned Ford against running ads in the US last fall — ads that prompted Trump to terminate trade negotiations in October 2025. Ford eventually pulled the campaign after speaking with Carney.
“How did it work? Did he listen? I was right, by the way,” Carney said Thursday.
Speaking April 8, former chief trade negotiator Steve Verheul said Canada holds a strong hand and that economic pressure on the US will only grow. “Time is on our side,” he said. US Commerce Secretary Howard Lutnick had a blunt reply: “the worst strategy I’ve ever heard.”
Read: Lutnick Slams USMCA as ‘Bad Deal,’ Pushes for Overhaul Ahead of July Deadline
Bloc Québécois Leader Yves-François Blanchet urged Ottawa not to wait, calling for a real negotiation rather than banking on Republican midterm losses. Carney said Canada is ready either way. “We’re ready to go into detailed negotiations. We’re also ready to wait, if that’s what has to happen.”
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