DES MOINES \u2013 Iowa Sen. Chuck Grassley said U.S. President Donald Trump\u2019s threat to hit an array of Canadian goods with new tariffs should serve as a \u201cwake-up call to Canada to make some changes.\u201d<\/p>\n
\u201cI think the president is probably using them as a lever,\u201d Grassley said Friday in an interview with The Canadian Press at the Iowa State Fair in Des Moines.<\/p>\n
While the senior Republican has been a key backer of Trump\u2019s agenda on Capitol Hill, he also has continued to voice his support for free trade despite the president\u2019s growing tariff regime.<\/p>\n
Grassley said there\u2019s nothing wrong with Canada and the United States having tough negotiations but they can\u2019t be allowed to undermine the trilateral trade agreement known as CUSMA.<\/p>\n
\u201cThese negotiations cannot be used as a way of destroying (CUSMA),\u201d Grassley said.<\/p>\n
Canadian officials have intensified trade talks with their American counterparts in recent weeks after Trump signed an executive order to impose 50 per cent tariffs on a range of Canadian goods starting Aug. 19.<\/p>\n
The Trump administration says the new duties are a response to provincial bans on U.S. liquor, Canada\u2019s supply-managed dairy system and quotas on certain U.S. vehicles.<\/p>\n
With the exception of Alberta and Saskatchewan, all provinces and territories have banned the sale U.S. booze over the past year in response to the Trump administration\u2019s tariff policy.<\/p>\n
United States Trade Representative Jamieson Greer, who was also at the Iowa State Fair on Friday, called the talks with Canada \u201cconstructive\u201d but gave no sign that a deal might emerge in the days before the new duties take effect.<\/p>\n
Unlike most of Trump\u2019s other tariffs, the new duties would have no exemptions for goods that comply with the continental trade pact.<\/p>\n
CUSMA was negotiated during the first Trump administration to replace the North American Free Trade Agreement. The sometimes volatile negotiations served as a key test for Ottawa but ultimately all three countries came to an agreement.<\/p>\n
The Trump administration said in July it would not be extending CUSMA for another 16 years. That triggered an annual rolling review process that will continue for a decade, at which point the deal would expire if the three countries do not agree on an extension.<\/p>\n
Trump has cast doubt on the future of the agreement, calling it \u201cirrelevant\u201d and saying it may have served its purpose.<\/p>\n
Mexico and the United States have begun official CUSMA negotiations, but no such talks have started between Ottawa and Washington. Political observers say that Trump\u2019s latest tariff threats are meant to force Canada to the table.<\/p>\n
Grassley has long said that CUSMA should remain in place. On Friday, he said Trump wants to \u201ctweak\u201d the agreement a little bit and accused Canada of not upholding its CUSMA commitments to dairy access.<\/p>\n