Canadian opposition leader calls for tariff-free trade with the US

With the US-Mexico-Canada Agreement (USMCA) coming up for review this year, Canadian opposition leader Pierre Poilievre, on a recent visit to New York City, called for tariff-free trade with the US.

Poilievre, who delivered a lecture on “The United States and Canada: Taking Stock and Looking Ahead” at an event hosted by the Foreign Policy Association at the Harvard Club of New York City, underscored the need to strengthen bilateral US-Canadian relations by boosting Canada’s economic and political leverage, advocating tariff-free trade, strengthening the economy and the energy sector, and building up pragmatic USMCA cooperation. He cautioned against letting the current rupture with the U.S. escalate into a permanent feature, adding that Canada could not rely on China as its largest trading partner.

According to the US Trade Representative’s office, US-Canada two-way goods trade totaled $719.5 billion in 2025. US goods exports to Canada in 2025 were $336.5 billion, down 3.8% ($13.4 billion) from 2024. US goods imports from Canada totaled $383.0 billion in 2025, down 7.0% ($28.9 billion) from 2024. The US goods’ trade deficit with Canada was $46.4 billion in 2025, down 25.1% ($15.5 billion) over 2024.

“I am here to make a case for Canada … we sell 20 times more to America than to China … we have to get our relationship (with the US) back on track,” Poilievre said, in a veiled reference to the strain in relations caused, mainly, by US tariffs. President Donald Trump’s characterization of Canada as one the US states also did not go down well in Canada.

Poilievre also recalled what former President John F. Kennedy once said about US-Canadian ties: “Kennedy said that our geography made us neighbors, history made us friends and economics made us partners.”

Canada’s Leverage

The Canadian opposition leader said that Canada’s biggest plus was its leverage. “We are America’s second biggest customer. We are the number one destination for exports from 30 different states. Oil prices are up 60% a gallon. Americans are paying five bucks a gallon. We are the single biggest oil supplier to America. We sell ten times more oil to America than the next biggest supplier Mexico. We have the ability to produce an extra 2 million barrels of oil (a day) which would be about 10% of your daily consumption,” he said.

Poilievre also touched on the question of strategic minerals whose importance has made the US acutely aware of its dependence on China, the largest supplier of the commodity to the US. China recently used its leverage as a rare-earth supplier to prevent Washington from imposing higher tariffs.

“(Canada has) 10 of the important minerals that are needed for defense and modern warfare … whether it’s cobalt for the alloys that go into jet engines or germanium for night vision technology or aluminum for armored vehicles and aircraft, the list goes on. We should build up a massive strategic reserve of that and avail it to those allies that sign us for free trade agreement …” Poilievre said. He added: “… what we would like in return from the Americans is tariff-free trade. We want tariffs to be removed from our aluminum, all the steel, autos, lumber, etc. So simply put build up strength using our leverage and use that leverage to get tariff-free trade.”

Poilievre maintained that free enterprise would see a “big resurgence because it is the greatest economic system the world has ever seen. We have better living standards, higher mortality rates and literary population, better healthcare system, etc. in free enterprise economies than in government-controlled economies …”

At the event, Poilievre was later quizzed by Catherine Loubier, a Montreal native, who has divided her career between the private sector and Canadian politics; she currently operates as a senior advisor to the corporate world on issues such as public policy and governance, energy and infrastructure, and Canada-United States relations.

USMCA Faces Volatility

But Poilievre’s speech also reflected unease over the USMCA’s future course. Canada and Mexico were both dismayed last year by the Trump administration’s tariff increases on a wide range of products exported by both countries to the US. The three countries are signatories to the USMCA, which, as a successor agreement to the North American Free Trade Agreement (NAFTA), went into effect on July 1, 2020, and is coming up for review on July 1, 2026; all three partner states are seeking to address ongoing tensions. Besides facilitating trilateral trade among the partners, the agreement also contains several provisions for enhancing trilateral cooperation against non-market distortions.

The USMCA covers a wide range of products, including cars and trucks, dairy products and agricultural goods, lumber and forest products, steel and aluminum, crude oil and natural gas, digital technology and services, etc.

While the USMCA is officially valid until the end of 2036, the pact is set for a formal six-year review in July 2026. All three partners must agree to extend the deal for another 16 years, failing which the agreement will automatically terminate in 2036.

Apparently, Poilievre had this in mind while pleading for strengthening trade and economic ties with the US, even as the Canadian Prime Minister Mark Carney has been visiting several countries – the EU, India, China, etc. – and trying to foster closer economic ties with them as relations with the US could take a further downturn.

Experts say that revisions to the USMCA will likely address US economic and political concerns, particularly about rules of origin for automobiles manufactured in the USMCA region to qualify for tariff-free trade. Steel and aluminum are equally important for the U.S., which argues that domestic producers would be favored if tariffs continued or were further increased to support pricing power. US chemical and fertilizer companies will benefit from tariff protection and potentially lower energy costs, though this is causing concern to Canadian producers.

Agricultural products are another source of friction between the US and Canada, with the US keen to protect the interests of US farmers. In this context, energy flows also cause irritation between the US and Mexico, with the US viewing energy as a national security priority. Then there is the issue of labor rights, which the USMCA is called upon to address in view of the growing proliferation of artificial intelligence (AI).

There are high stakes in the USMCA with an estimated $2 trillion in trade and millions of trade-related jobs. An early finalization of the USMCA’s review would be in the interest of the trade pact since stability and clarity in the trilateral relations are of paramount importance for the future.

The upcoming weeks and months portend to be a phase of uncertainty. One scenario would be Trump drastically overhauling the pact, subjecting it to annual reviews instead of a six-year review, or even preferring bilateral accords. As one Canadian guest at the Harvard Club event told the American Journal of Transportation, “we can only wait and watch … and hope for the best.”