The Current - CUSMA: What does the U.S. want from us?

Episode Date: June 1, 2026

Canada, the U.S. and Mexico are due to review their three-way trade deal July 1 — but one month out, how are things looking for this country? Former acting U.S. Trade Representative in President Trump's first term, Stephen Vaughn, shares the American perspective; and Brian Clow, who handled Canada-U.S. relations as deputy chief of staff to former Prime Minister Justin Trudeau, and Jacques Shore, partner at law firm Gowling WLG and expert on international trade, map out the potential path forward for Canada

Imagine you've been charged with a crime, and the only witness pointing the finger at you isn't even human. I remember thinking, are you serious? What is this thing? It's something artificial, created by a mysterious Canadian. And it's coming for all of us. A life-defining technology. Crime as we know it will never be the same. I'm like, oh my God, he's lying.

From CBC's Uncover, The Expert Witness. Available now on CBC Listen or wherever you get your podcasts. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. Canada Strong will help make America great again. Examples of where that's true are Legion, where we should work together and compete with the world together. Prime Minister Mark Carney was in New York City last week

to deliver that message to a room full of American financial heavyweights, and the timing, of course, was not accidental. One month today, the Canada-U-S.-Mexico trade agreement, Kuzma, is up for review. On the line, well, just a $1.3 trillion trade relationship between Canada and the U.S. To get a better sense of how the Trump administration is approaching this moment, I'm joined by Stephen Vaughn. He was the acting U.S. Trade Representative and General Counsel to the U.S.T.R. office during President Donald Trump's first term. He's in Washington. Good morning, Stephen. Good morning. Thanks for being with us. Well, as we mentioned, today marks the initial deadline for countries to notify each other of changes they want to make for this review. Give us a sense of the feeling in Washington. Does the Trump administration want to strike a

fair deal with Canada, or does the Trump administration want to make us pay for the privilege of trading with the U.S.? Well, they definitely want to strike what they were regarded as a fair deal. However, obviously, they're going to want to make some changes to the deal. They've always thought that the deal was outmoded and that it needs to be updated to address a lot of modern issues. Obviously, the U.S. is going through a period where they're trying to reindustrialize the country and trade is a big part of that. And that's something that they're going to take seriously. They've reached new trade agreements with almost all of their major trade. partners, and they're going to expect new terms with Canada as well.

But do new terms mean new concessions? Well, it's certainly going to, of course, you're going to expect some concessions. I don't think there's any question about that. I think they've been pretty clear about that the whole time. But I think it's important to put all that in context. I mean, my guess is when this is all finished, even with the concessions, Canada will have a better relationship with the U.S. than almost any other country. and Canada will have a better relationship with the U.S. than it can get from any other country.

Why are you convinced of that? Because I think at the end of the day, you know, the United States is going to have trade barriers up with almost everybody. And I think the trade barriers with Canada will probably still be lower than they are with almost anybody else. And I know that the Carney government has been talking to its partners in Europe and in the CP, the Trans-Pacific Partnership, and the other trade deals that Canada is a part of. And I still believe when the negotiations are finished with the U.S., you'll have more access to this market than you have to Europe or Japan or most other markets. Yeah, I wanted to ask you about that.

I mean, while our prime minister is overseas, as you mentioned, he's been trying to increase trade with Europeans in Asia as well, in China, of course. Does that sort of sour our relationship with the U.S. in your opinion? No, I don't think so because I don't think the, I mean, I think the Americans are quite confident that no one, is going to give you that much market access. I mean, look at the problems the UK is having, negotiating with the EU. Look at the problems that everybody has negotiating with countries in Asia.

So I think that, you know, you're welcome to try. But we think at the end of the day, you know, the U.S. is still going to be far and away Canada's best option. We heard the clip of Prime Minister Carney off the top when he's got this message, Canada Strong will help make America great again. That was the message he brought down to the New York City. crowd. How did that land in Washington? I think that's better than some of the other

rhetoric we've heard out of Canada recently. And I think it's encouraging. I think Americans are still going to want to know how does America benefit from Canada buying Chinese cars and some of the other things that the government has tried up there lately.

But certainly that type of rhetoric is going to go over a lot better than some of the more hostile and aggressive rhetoric that Well, tell me about that because I'm curious to know about that. When we're having a trade relationship, as we mentioned, $1.3 trillion. How much does rhetoric really enter the equation? Does it have an impact on the actual negotiations?

Well, I think there's a big difference between, I mean, if you look, for example, the negotiations of Mexico, and you look at what you've had over the last year and a half, there's been very little rhetoric between the U.S. of Mexico. It's been, the perception here in Washington is, is that the negotiations with Mexico are taking place at a very technical level. The business communities are involved. The technicians are involved. And I think the perception here is that U.S. and Mexico are much closer to a deal. It all depends on rhetoric in and of itself doesn't necessarily affect dealmaking. But the question becomes how committed are you to getting a deal?

Are your people authorized to really sit down with USTR and make the type of concessions that USTR is looking for? Or are you more interested in sort of playing to the crowd? That's where I think it becomes important. But do you see Canada as being somehow, you know, stubborn in our approach with trade in the U.S.? I think there's definitely a sense that Mexico has taken these negotiations more seriously up to this point. that they've been more willing to engage. They've been more willing to put some serious ideas on the table. And I think the perception here is that those negotiations are further along than the talks with Canada.

But, of course, you know, that can all change. And I think people here are hopeful that, you know, they're going to have deals with both countries, you know, by the end of the year. But is there the possibility? And give me your view on this. I want to talk to our Canadian people as well on this, that there's a bit of a divide-and-conquer approach right now with the U.S. negotiating with Mexico, and they're going to do that at our expense? Well, I definitely think if I were in Canada, I would be concerned about the possibility that the U.S. and Mexico reach their own deal, you know, because that, you know, as you will recall,

that's sort of what happened the last time we had this go-around. The deal between the U.S. and Mexico was announced, and then a month later, the deal between the U.S. and Canada was announced. I definitely think that once the U.S. and Mexico, for example, if the U.S. and Mexico reach an agreement on how we're going to structure the auto sector, it's going to be hard for Canada to come in and get those two countries to change that deal. So that does sound like a dividing conquer approach to me. Well, I think that, look, I think the Americans, I wouldn't call it that. I think that we have certain issues with Mexico and we have certain issues with Canada. And there's some issues where it makes sense for us to go ahead with Mexico. There's other issues that are, more Canadian-specific. So I think it's just an efficient way of conducting the negotiations.

So what advice would you have for the Canadian team moving forward? For one thing, I would make sure that you're, you know, that you've got your technical people and you've got everything working at a very technical level so that it's not just all, you know, being distracted by political rhetoric. And I would make sure that, you know, the business community in Canada is very involved so that, you know, you have a good sense of how important this relationship is to your stakeholders in Canada. And then I would be, you know, working pretty aggressively to see if I could get this thing done as quickly as possible. I mean, if it's not done by the end of this year, then you're getting

very close to another U.S. election cycle. And it could take a while before it gets finished. We'll be watching. Stephen, great to have you on the show this morning. Thank you very much. Thanks for having me. Stephen Vaughn was the acting U.S. trade representative during President Donald Trump's first term. Imagine you've been charged with a crime, and the only witness pointing the finger at you isn't even human. I remember thinking, are you serious? What is this thing? It's something artificial, created by a mysterious Canadian, and it's coming for all of us.

A life-defining technology. Crime as we know it will never be the same. I'm like, oh my God, he's lying. From CBC's Uncover, The Expert Witness. Available now on CBC Listen or wherever you get your podcasts. Well, for the Canadian perspective, I'm joined by two guests. Brian Clow handled Canada-U. Canada-U.S. Relations is deputy chief of staff to former Prime Minister Justin Trudeau. He's here with me in our Toronto studio.

And Jacques Shore is a partner at the law firm, Gowling WLG, and an expert on international trade in Government Affairs. He's in our Ottawa studio. Good morning to you both. Good to be here. Thank you. Brian, let me start with you. I just want to get your views on what you heard there. Because I read you said, guys in the Trump administration hate Canada. I saw that quote from you. I'm listening to him. I'm thinking, I don't know if there's hate, but there just seems to be maybe a little stern feeling towards Canada. What do you think? There's definitely more of a feeling in the second Trump term versus the first Trump term that when I was there, that some folks in the Meg of movement have a feeling towards Canada that's just much more aggressive and negative towards

the country as a whole. And that is definitely influencing the feeling in the administration. That's my view. But how does that actually influence? And that's what I was trying to get from Stephen as well, with the rhetoric. What role does this play? What impact will that have on the outcome of these negotiations? Well, I say in the first Trump term, it was very tough. we faced a lot of challenges, particularly on the trade front. But at the end of the day, both sides, Canadians and the Americans ultimately wanted to get to a deal. That was plan A. This second Trump term, I'm not so sure the Americans are looking to get to a deal that is good for both sides.

And that's why this negotiation has been so tough so far. It's why we don't have a deal yet. Jacques Shore, how would you describe the current Canada-U.S. relationship? Well, I think it's a challenge. I have to say that I was pretty well heartened by what Stephen Bond had to say, because I think he very plainly sort of set out almost a bit of a road map as to what we should be doing. There's no question that it is in our economic national interest to make sure that we come up with a deal. And I guess I'll start off by saying that if there are elements that are a bit difficult for us, well, we have to sort of think about what, you know, how can we make that that, that, that, that, that, that, that, that, that, that, that, bitter pill as small as possible so that this can work out and then maybe take advantage by being able to ensure that we have other elements in this deal that are certainly to our interests and work well. I mean, this is an issue right now where, you know, we have to focus on how we make this deal work. I mean, so much of our economy depends on this. I think that what the Prime Minister has done is certainly correct in terms of diversifying our trade activities with other

countries, which could also be to the benefit of the United States. But I think we have to really demonstrate to the U.S. just how critical it is for them and for us. And I totally believe, I thought that was a fantastic statement made by our prime minister, that, of course, you know, we can help make America great again. Canada North Strong is sort of a feature that I'd like to see that better understood also by Americans that maybe have an irritant feeling towards Canada today. But that means we have to work hard, but I have no doubt that we can actually achieve that just simply because of the relationship that's lasted and how beneficial it's been for both our countries for these many decades past.

But what leverage, Jacques, do we have in achieving that? Well, I think we do have leverage because we have things that the Americans do need. Just a few months ago, we were talking about the fact that, you know, potash is something the United States does not have. We have the ability of being able to sit down and address issues with respect to critical minerals, which are extremely at this point critical. We have the ability of being able to demonstrate that we are a reliable partner. We have areas that we can look at at agriculture, in energy. I think we can be somewhat more creative also in terms of how we integrate. But I mean, to a great extent, I mean, our whole supply

chain between the United States is so extremely important. And I think part of that is also getting those Americans who have been speaking up, I think, lately, on site to make their their position stronger. I think that, I think it's a situation right now where we probably have to do a little bit more to educate quietly Americans to recognize that we are, we are their best friends. I think we have to look at them in a way as, you know, these are American cousins that we have worked with and benefited from for so many years. And look, geography is not going to change. I think it's absolutely clear. I think the Europeans also see that that's to their benefit if we have a good relationship with the United States

and what they may be able to do with us in that context as well. Brian, you were at the table during trade negotiations the last time round. What's it like to negotiate with Donald Trump? It is challenging because they are the bigger partner. They have a lot of power over us. But at the same time, Canada, as you just mentioned in your previous question, has its own leverage. We have a lot to bring at the table. We have stuff they want from us. It is, there's a certain level of chaos involved in negotiating with this particular president,

his team, versus some other teams that we dealt with. But ultimately, we worked through it. He has this approach, though, and he says it often, it's like, we hold all the cards. I hear him say that so often. You have no cards. To him, I feel this is a zero-sum game about winning. Is this the approach that he wants to? to win this negotiation, we have to deal with those parameters? I think it is. And this is part of the reason it becomes so challenging. And what we are facing right now is a country, the demands from the United States.

On the one hand, they're saying, and you heard it in your American guest, they want a whole bunch of concessions from us. At the same time, they're signaling very clearly they're going to keep the tariffs on steel aluminum autos. Maybe they'll lower them a little bit if we can get some sort of deal. if you look at that whole suite of requests from the Americans, it is entirely zero-sum. It's all concessions from Canada. And this is why this negotiation is proving so challenging and why a year and a half into the second Trump term, we still don't have a deal. Jacques, I want to ask you about the comments that Jameson Greer, he described Canada as, quote,

in a different spot from other countries when it comes to negotiating deals. And he noted that it was only Canada and China that chose to retaliate against the tax. tariffs. What do you make of that when you sort of lumping us in with China as an adversarial country? Well, not an easy situation to be in, but I think again, I mean, when we talk about rhetoric or we talk about the things that maybe get, you know, get us, how can I say stand up a bit to sort of wonder where this is all coming from. Look, I think what we have to then do is understand that we've got to do better at being able to demonstrate our willingness to actually sit down and talk to them about what it is that is irritating them.

I don't think it helps if we don't sort of change, and I'll use a word here, our attitude a little bit to sort of understand that we are, let's say we're in the seventh inning stretch right now, and we have a fair bit of work to do to actually get to the end of the game so that we can make that grand slam, which I still think is possible.

If we demonstrate, we're not talking about elbows up, but frankly willing to work arm and arm. And I think it's, you know, it's sitting down, understanding some of these things in a clear way. Look, previous administrations have had problems with Canada as well. Maybe it hadn't been so public, perhaps president, previous presidents, not been so open in terms of the way in which they describe that relationship or how they

feel about Canada? But, you know, I remember Condoleezza Rice used to say, you know, how come when we sit down with Canada, it's always about condo issues. We're not talking about global issues. And I think that's where we've learned, you know, we can learn a lot. I think that this, our government right now, our Canadian government, I think, is. really standing up. Look at, I mean, there was a real concerns, true or not, with respect of Fendell, but we've, you know, we're addressing that. There are concerns about how, you know,

how we approach issues on defense. I mean, it is remarkable that in this short period of time, that, that Prime Minister Carney has been, Prime Minister, that we have increased now up to 5 percent and we really are playing a serious, a serious country out there to recognizes that North American Defense is important and we have to look at the North and elsewhere. So that's sort of an example of what I think we need to demonstrate to the United States. Yeah, Brian, what do you think about that? We've increased defense spending. There was this thing about fentanyl being an open border there, which was not true.

I mean, there's some issues there. We have addressed those. Will those make a difference when you still have the idea that they're going to be increasing the tax on streaming services, which has been an irritant? The fact that here in Ontario and other provinces that pulled U.S. booze off the shells seems to be an irritant. where are we in terms? Are we making the right concessions or are they still seeing right now as us being an irritant? Right. Where I agree with your guest is I actually do think this is an opportunity to come to an agreement. Despite the challenges that we talked about over the last

year and a half, the July 1st deadline, the review date of Kusma presents an opportunity for all sides to come together and try to see if we can get to an agreement. I know the Canadian government, that is plan A to try to come to an agreement here. But we've got a lot to overcome. Is there a plan B where we don't come to an agreement? Plan B is we continue in the same situation we're in right now, where the deal enters this period of ongoing annual reviews and the conversation continues and the urchins continue. Okay.

Well, we'll be watching this one closely. I mean, we are, I don't know, Jacques, you say we're in the seventh inning stretch. I'm not sure exactly where we are in all this. And it's the next little while. It's all coming down to the line. We'll be watching this closely. Thank you both. Brian Klau was Deputy Chief of Staff for former Prime Minister Justin Trudeau.

Jacques Schor is a partner at the law firm, Gowling, and an expert on international trade and government affairs. Thank you both. You've been listening to the current podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon. For more CBC podcasts, go to cbc.ca.

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