By Promit Mukherjee
OTTAWA, June 30 (Reuters) – The U.S., Canada and Mexico are due to meet on July 1 to review a trilateral trade agreement after a period of heightened tensions between Washington and Ottawa.
The agreement, known as USMCA, must be reviewed every six years under a deal made during U.S. President Donald Trump’s first term. Trump has been noncommittal on renewal.
As Trump threatens Canada by calling the country the 51st U.S. state, Canadians have cut back on travel and stopped buying American products. The opening of a new bridge connecting Windsor in Ontario to Detroit has been delayed.
Below are some of the issues the U.S. Trade Representative’s Office (USTR) highlighted in its 2026 National Trade Estimate report on Canada released earlier this year. A spokesperson for Canada’s minister in charge of U.S. trade declined to comment on these irritants.
DAIRY AND SUPPLY MANAGEMENT
Washington has criticized Canada’s supply-managed dairy, poultry and egg sectors, saying production quotas and tariff-rate quotas limit access for U.S. exporters. Canada imposes tariffs that can exceed 200% on imports above quota levels.
The U.S. has also complained about Canada’s administration of dairy import quotas created under USMCA and raised concerns over milk pricing policies and market access for U.S. dairy products. Prime Minister Mark Carney’s government has said previously supply management will not be on the negotiating table.
BUY CANADIAN POLICIES
The U.S. says Canada’s new Buy Canadian initiative gives preference to Canadian firms and domestically produced steel, aluminum and wood in major government contracts.
Washington has also objected to measures adopted by provinces including Ontario, Quebec and British Columbia that restrict or disadvantage U.S. suppliers in procurement competitions.
WINE, BEER AND SPIRITS
Most Canadian provinces control alcohol distribution through government-run liquor boards, which the United States says impose barriers ranging from listing restrictions and pricing rules to distribution requirements.
The issue became even more contentious after several provinces stopped distributing U.S. alcohol products in response to Trump’s tariffs on goods from Canada from last year. Ontario Premier Doug Ford has refused to put U.S. liquor back on shelves unless tariffs are removed or a new trade deal is reached.
DIGITAL SERVICES TAX AND ONLINE STREAMING
The U.S. continues to monitor Canada’s digital services tax, which Ottawa pledged to repeal but had not formally eliminated by the end of 2025, the March report from USTR said.
Washington has also raised concerns about Canada’s Online News Act, which requires major digital platforms to compensate Canadian news organizations, and online streaming rules that require certain services to contribute to Canada’s broadcasting system. Canada’s government has signaled it will back off plans to force entertainment companies such as Netflix to contribute to Canadian productions, saying it doesn’t want consumers to face higher costs.
AGRICULTURE AND SEEDS
The U.S. says Canada’s seed registration system is slow and cumbersome, limiting market access for some U.S. seed and grain exports.
Washington also continues to object to restrictions affecting imports of certain fresh fruits and vegetables.
INTELLECTUAL PROPERTY
Canada remains on the U.S. Trade Representative’s Watch List for intellectual property protection.
The U.S. cites concerns about counterfeit and pirated goods, including sales at Toronto’s Pacific Mall, as well as issues related to patent protections and geographical indications.
LABOR ENFORCEMENT
While Canada has adopted measures intended to block imports produced with forced labor, Washington says enforcement remains insufficient and could allow such goods to enter the Canadian market.
Earlier this month, Canada introduced new legislation to strengthen the ban on importing goods produced with forced labor.
ALBERTA ENERGY MARKET
The U.S. says Alberta’s electricity market continues to disadvantage U.S. power producers. Washington says stakeholders have complained that electricity generated in neighboring Montana is given lower priority than equally priced power produced in Alberta, limiting access to the province’s energy market.
PHARMACEUTICAL PRICING
Washington says Canada’s Patented Medicine Prices Review Board unfairly depresses prices for innovative medicines by excluding the United States and Switzerland from the basket of countries it uses to benchmark patented drug prices. U.S. industry argues the approach artificially reduces the value of innovative medicines in the Canadian market.
(Reporting by Promit Mukherjee; Ediitng by Caroline Stauffer and Sanjeev Miglani)
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