Canada could suffer collateral damage from US measures aimed at Mexico.
A top adviser to US President Donald Trump will meet with advisers to Canadian Prime Minister Justin Trudeau this week as his Liberal government gathers to plan a response to a possible renegotiation of the NAFTA trade accord. Jared Kushner, Mr Trump's son-in-law, will travel to Calgary, Alberta, where the Canadian cabinet is meeting on a two-day retreat, according to a source, who requested anonymity given the sensitivity of the matter.
Mr Trump's vow to renegotiate the key trade agreement, which also includes Mexico, could sideswipe Canada's export-driven economy, and the visit by Mr Kushner underlines the ties developing between the Trudeau and Trump camps.
The meeting of Mr Trudeau's leadership team, less than two weeks after he shuffled his cabinet to put his top minister in charge of the US relationship, is focused mainly on the best approach to take with Mr Trump, who was inaugurated on January 20.
Mr Trump said on Sunday he plans talks soon on the North American Free Trade Agreement, under which Canada and Mexico send the majority of their exports to the United States.
Canadian officials, trying to persuade the new US administration that focusing on Canada makes no sense, given how closely the economies are linked, say the Trump team is most concerned about large US trade deficits with China and Mexico.
"They haven't said anything specific about any real problems that they have with us," said David MacNaughton, Canada's ambassador to Washington and a key player on the NAFTA file.
The danger, he told reporters on Sunday, is that Canada could suffer collateral damage from US measures aimed at Mexico.
Stephen Schwarzman, chief executive officer of investment firm Blackstone Group LP, has been invited to address the retreat on Monday. Mr Schwarzman chairs a panel of business leaders who give Mr Trump advice.
The challenge of dealing with Washington comes at a sensitive time for Mr Trudeau, who is facing probes into a vacation he took with the Aga Khan as well as his centrist Liberal Party's fundraising activities.
He is also under fire from Kevin O'Leary, a television personality running for the leadership of the opposition right-leaning Conservative Party, who says Mr Trudeau is too weak to stand up to Mr Trump.
Mr O'Leary complains that Mr Trudeau, who came to power in 2015 promising to run a few years of modest budget deficits to fund infrastructure projects, has increased spending so much that finance ministry officials predict shortfalls for decades.
While polls show the Liberals well ahead of their rivals in the run-up to the 2019 election, pollster Nik Nanos of Nanos Research says Mr O'Leary could eat into Liberal support by positioning himself as a fiscal hawk.
© Thomson Reuters 2017