US Ambassador Says White House Was Hoping for ‘Bigger’ Agreement With Canada Than USMCA

U.S. Ambassador to Canada Pete Hoekstra poses for a portrait at the U.S. Embassy, in Ottawa on June 6, 2025. The Canadian Press/Sean Kilpatrick

The U.S. administration was hoping to work out a “bigger deal” with Canada than the United States-Mexico-Canada Agreement (USMCA), U.S. Ambassador to Canada Pete Hoekstra says, adding that this is currently unlikely to happen.

Hoekstra made the comments while speaking about the state of Canada-U.S. relations at a Sept. 16 event in Ottawa hosted by the Canadian International Council. He said the White House was looking for a deal that would span various sectors.

“Americans were hopeful that we could negotiate a bigger deal,” Hoekstra said, as first reported by The Globe and Mail. “I mean, there is so much that we do together, where our economies are integrated, they graft off of each other and those types of things.”

He said the White House was hoping to “not just renegotiate” USMCA, but instead hoped to “take it into being something much bigger,” noting it could span sectors such as energy, automotives, nuclear, and defence.

“It’s obvious, at least at this point in time, that that’s not going to happen,” Hoekstra said, but didn’t specify why such a deal wouldn’t happen.

The ambassador said the United States has begun public consultations on the USMCA.

The Office of the U.S. Trade Representative (USTR) announced on Sept. 16 the launch of the public consultation process, which will be open for 45 days, ahead of the joint review of the agreement next year. The USTR will also hold a public hearing on Nov. 17.

Prime Minister Mark Carney had sought in March to begin “comprehensive negotiations about a new economic and security relationship” with Washington after the April election, but there hasn’t been any breakthroughs since.

U.S. President Donald Trump has imposed 35 percent tariffs on all Canadian goods not covered under the USMCA, as well as 50 percent tariffs on steel and aluminum, 25 percent tariffs on cars and auto parts, and 10 percent tariffs on energy products and potash.

Carney has argued that Canada has the “best trade deal” with the United States compared to other countries, since more than 85 percent of Canada’s exports to the country are covered under the USMCA. Carney announced on Aug. 22 that Canada will remove some retaliatory tariffs it had placed on the United States in response to U.S. tariffs as a goodwill gesture designed to resume stalled trade talks.

During the first question period of Parliament’s new sitting on Sept. 15, Carney said the Canada-U.S. relationship is “good” and that he regularly speaks with Trump, including over text message.

Automobiles

At the Sept. 16 event, Hoekstra was asked how the Canada-U.S. automobile relationship could look in the future. Hoekstra noted Trump’s trade deal with the United Kingdom, which involved a reduction of tariffs on UK-made automobiles.

The deal features a 10 percent tariff on the first 100,000 UK vehicles exported to the United States and any additional vehicles exported are subjected to the original 27.5 percent tariff.

Hoekstra noted that Canada exports approximately 400,000 more vehicles to the United States each year than it imports from the country, and said it could be possible to follow the same model as the U.S.-UK deal where 400,000 exported Canadian vehicles would face a lower tariff, but any more would be subject to a higher tariff.

He also said he predicts that some industries impacted by the sectoral tariffs might relocate to the United States.

“We understand the economics and how you’ve built your economy around those types of things, but over a period of time, in some of these critical industries, you know, we’re going to see some of that moving back into the United States,” Hoekstra said.

China

The ambassador also spoke about Chinese tariffs, and praised Canada for the levies it has imposed on China, including 100 percent tariffs on Chinese-made electric vehicles as well as 25 percent on Chinese steel and aluminum last October, which followed America’s lead.

“We very much appreciate the decision that Canada has made, and we recognize the cost that you are paying for that,” Hoekstra said. “It’s contained China; let’s work on this stuff together, and we will recognize the economic impact that it has had on Canada.”

In March, China announced tariffs on US$2.6 billion worth of Canadian goods, including 100 percent tariffs on canola oil, oil cakes, and pea imports, as well as 25 percent on aquatic and pork products.

Hoekstra said at the Ottawa event that the United States sees China as an economic and military threat, and noted Beijing’s role in helping Moscow wage war in Ukraine. Trump has also accused China of “years of unfair trade practices,” such as dumping, forced technology transfers, overproducing, and industrial subsidies.

Carolina Avendano, Matthew Horwood, and Omid Ghoreishi contributed to this report.