Canada has been hoping to have it both ways — by modernizing NAFTA with the Trump administration while still expanding its trade with China. That may not be practical. It's an especially risky strategy when it comes to lifting those U.S. steel tariffs, something Canadian officials have indicated is a precondition for agreeing to any NAFTA concessions.

"We started off originally trying to have some kind of overall agreement that would accomplish that," Lighthizer said Tuesday, when asked about exempting Canada or Mexico from the steel and aluminum tariffs.

"I think our view is now we'll turn to that as a next stage when we get NAFTA done," the USTR said, echoing President Trump's own view that the tariffs serve as leverage in the NAFTA talks.

This was excerpted from 26 September 2018 edition of the CBC News.