Canada and US Close to Trade Deal as Carney Asks Provinces to End US Alcohol Boycott

Prime Minister Mark Carney has asked Canadian provinces to restore US alcohol to the shelves of liquor stores and supermarkets as a trade deal with the US edges closer.

Trade negotiators met on Thursday in Washington for the fourth time in as many days, with Canada-US trade minister Dominic LeBlanc telling reporters afterwards that a deal is "very close".

Details on what the proposed agreement includes have not yet been announced, but premiers of Canada's provinces said Carney had asked them to end to the boycott of US whiskey and other alcohol.

Reports suggest the deal may cover Canadian steel, aluminium and cars, in addition to US booze.

Speaking to reporters on Wednesday after meeting his Canadian counterpart, US trade representative Jamieson Greer said the US was "very happy" and that the deal eliminated "some of the irritants" with Canada.

US President Donald Trump paused a new wave of tariffs he had threatened to impose overnight on Wednesday on a range of Canadian goods to allow the deal's details to be hammered out.

Trump said on Wednesday that Canada has agreed to eliminate tariffs on US farmers, though he did not specify which specific agricultural sectors would benefit.

Asked whether the US will also reduce some tariffs it has placed on Canada, Trump said by "a little bit".

In a post on X on Wednesday, Carney said "significant progress" had been made and that they were moving towards an agreement that addressed "Canada's most important strategic sectors".

Canada has been in pursuit of a deal that would have the US drop or reduce tariffs on its steel, aluminium, automobiles and lumber.

Under a deal that could be completed by Friday evening, US tariffs on Canadian steel and aluminum would reportedly be cut to 25% from 50%.

The US may also lower its headline tariff rate on Canadian-made vehicles from 25% to 15%, according to reports from US and Canadian media.

The prime minister met his cabinet and leaders of Canadian provinces on Wednesday afternoon to brief them.

Following Carney's meeting, Nova Scotia Premier Tim Houston said the prime minister asked provinces to return US alcohol to Canadian markets.

"It's been something that has kind of really bothered the United States for so many reasons," Houston said. "Now, whether Canadians will really buy it when it's back on the shelf, that's a whole other discussion."

Most Canadian provinces banned US alcohol sales last year in retaliation to Trump's tariffs.

The US wine and spirits industry says they have seen exports to Canada drop by more than 70% since the boycott went into effect early last year.

Speaking to reporters on Thursday, Manitoba Premier Wab Kinew said his government is not keen to restore US alcohol sales but would in order to present a united Canadian front.

"I wouldn't say that he was begging us, but what is a step before begging?" Kinew said of Carney's request to the premiers, adding that he believed that bringing US alcohol sales back is imperative for finalising the deal.

Kinew said he does not expect to be satisfied with the final deal and that he believes Canada should fight because Trump is "very weak".

The US has been asking for a number of concessions from Canada, including removing its remaining retaliatory tariffs on American vehicles and adjusting its dairy quotas to allow greater access for US cheese producers.

LeBlanc has said that Canada's dairy supply management programme - which oversees production quotas and sets pricing and import quotas on dairy, eggs and poultry - will remain "entirely intact".

Quebec premier Christine Fréchette, whose province is home to Canada's dairy industry, said she spoke to the prime minister on Thursday morning to get more clarity on the deal.

She said the province is analysing it to determine its impact on the Quebec economy.

If the deal is "globally positive, it is possible that we put the alcohol back on the shelves", Fréchette added.

Polls suggest that a majority of Canadians would be unhappy if the Carney government made significant concessions to the US, with 56% surveyed by polling firm Leger, external saying they wanted Canada to take a hardline approach.

But business organisations from both sides of the border have lobbied for a deal to be reached, cautioning that additional tariffs between the two trading partners would be harmful for both countries.

Dennis Darby, president of Canadian Manufacturers and Exporters and a member of Carney's advisory committee on Canada-US trade, told the BBC on Wednesday he was optimistic a finalised deal was on the horizon.

He added that businesses hoped this would be the first step towards a return to the terms set under the North American free-trade agreement, known as USMCA, with most goods flowing tariff-free through Canada, the US and Mexico.