Canada and the U.S. haven’t made a major breakthrough yet despite intensive trade negotiations over the past week, according to a Canadian source familiar with the talks.

The source said there remains several sticking points and dissatisfaction with where some of the proposed terms currently stand, including over potential Canadian concessions on dairy.

“I don’t think we’re ready to give them what they want on dairy, and those are the kinds of things that you can imagine would be standing in the way,” said the source, who asked not to be identified because they’re not authorized to speak publicly. 

Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette have spent the past week in Washington meeting with their American counterparts, including U.S. Trade Representative Jamieson Greer. A government spokesperson said the two will remain in the U.S. capital over the weekend as talks continue.

LeBlanc and Charette met with Greer on Thursday but he spent Friday in Iowa, where he was touring tire manufacturers.

Speaking to reporters in Des Moines, Greer said Ottawa needs to drop its retaliatory tariffs as the two countries race to reach an agreement before another round of U.S. tariffs takes effect next week.

“The Canadians have come in and they want to have a conversation about it, and we’re having those conversations. I mean, again, this is a global trade policy,” he said.

“We have been suffering in the United States for decades under a trade policy that incentivizes offshoring to China, to Mexico, to Vietnam, but in some cases to Canada even, and we can’t allow that to happen anymore.”

The Americans have vowed to impose 50 per cent tariffs on a swath of Canadian goods come Aug. 19, saying the newest levies are a direct response to Canadian counter-measures on autos and liquor, as well as frustrations with the country’s dairy policies.

The source said the Americans appear to be open to extending the deadline considering progress in talks, but it’s unclear if it’s something Canada would agree to. iPolitics reported over the weekend that Canadian negotiators weren’t pursuing a deadline extension.

READ MORE: ‘We have been suffering’: Greer presses Canada to drop retaliatory tariffs

The federal government briefed the provinces and territories, and members Carney’s advisory council on Canada-U.S. relations on Friday.

The source said the imposition of any new tariffs would be “incredibly damaging” and likely derail talks.

“If a deal is going to get done, might as well get it done right, and might as well get it done before the [tariffs come into effect]. Because once those come in, I think the mood of Canadians will only sour further, narrowing the scope that the PM will have. And there’s a good chance that we would have countermeasures, and the Americans will have countermeasures.”

There are signs of movement elsewhere, however, with the source saying the Americans appear to be open to reducing tariffs on aluminum and potentially steel.

“There’s progress in the sense that the Americans are open, and it not, totally willing to reduce tariff rates on things like aluminum,” the source said. 

But, simply removing Canada’s retaliatory measures, the source said is unlikely to be enough for the U.S., as the Trump administration will want an additional concession it can point to as a “victory” and use to justify the trade actions that led to the negotiations. 

Ontario Premier Doug Ford’s shift in tone also comes as Canadian officials appear to be trying to keep tensions with Washington in check while negotiations continue, the source note. 

This week, Ford said he’s open to lifting Ontario’s ban on U.S. alcohol if the negotiation reaches a “fair deal.” The source also noted that he’s been noticeably less vocal, suggesting that the Americans are closely watching public comments made by Canadian political leaders, and could risk complicating the talks. 

“The Americans listen, and we want to have the president be in the best possible mood,” the source said. “It’s just the way it is.” 

Another source familiar with the talks said the broad outlines of a potential deal include U.S. relief from copper, steel, aluminium tariffs and the new levies that came into force because of what the Americans have framed as Canada’s inaction on eliminating forced labour in supply chains.

Canada would offer relief on counter-tariffs on U.S. steel and autos, and returning American booze to the shelves of provincial liquor stores. The federal government isn’t responsible for those liquor bans and it would fall to the individual provinces to make a decision.

The sources isn’t being identified because they aren’t authorized to speak publicly on the matter.

More to come…

with files from Sydney Ko