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Canada’s Ambassador to the U.S. Kirsten Hillman is expected to leave her post in the new year.Sean Kilpatrick/The Canadian Press

Kirsten Hillman, Canada’s ambassador to the United States and the country’s chief negotiator on U.S. trade, plans to leave the job in the new year ahead of a renegotiation of the continental free-trade deal.

Ms. Hillman announced the move in a statement Tuesday evening. The timing of her departure gives Prime Minister Mark Carney the ability to put “a team in place that will see the CUSMA review through to its conclusion,” she said, referring to the expected 2026 renegotiation of the United States-Mexico-Canada free-trade agreement.

She is expected to be replaced by Canadian financier Mark Wiseman, a close friend of the Prime Minister, a source told The Globe and Mail.

The Globe and Mail is not identifying the source because they were not authorized to publicly discuss the matter.

In June, the Prime Minister had asked Ms. Hillman to stay on as ambassador to Washington and take on the role of chief negotiator in tense trade and security talks with the Trump administration. But Ms. Hillman had made it clear she did not want to say in the job for very long.

Ms. Hillman has served in the Washington embassy since 2017, including six years as ambassador.

The Prime Minister said in a statement that this is an appropriate time for Ms. Hillman to leave, as Ottawa gears up for negotiations on the U.S.-Mexico-Canada Agreement, referred to as USMCA in the U.S. and as CUSMA in Canada.

“Ambassador Hillman’s intelligence, determined action and diplomacy have contributed immensely to the advancement of a new economic and security relationship with the United States – and prepared the foundations for Canada in the upcoming CUSMA review,” Mr. Carney said in a statement.

Those talks are likely to lead to a U.S. push for auto-industry rules of origin, new restrictions on Chinese companies in North America, as well as U.S. demands to dismantle Canada’s supply-management system.

Ms. Hillman is a lawyer with deep experience in trade negotiations. She was a key member of the team that worked to revamp the North American Free Trade Agreement during President Donald Trump’s first term. It was replaced by CUSMA. She also served as Canada’s chief negotiator for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Ms. Hillman and Trade Minister Dominic LeBlanc had been leading the Canadian team in talks with U.S. Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent.

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Talks to reduce punishing tariffs on Canadian steel and aluminum continued until the fall, when Ontario Premier Doug Ford ran anti-tariff ads in the United States. Those ads infuriated Mr. Trump and he abruptly cancelled the trade negotiations.

Formal trade talks between Ottawa and Washington remain frozen. When asked on Sunday whether he’d resume trade talks with Canada, Mr. Trump responded, “we’ll see.”

Mr. Trump imposed a range of tariffs on Canada as part of a broader suite of tariffs levied on all U.S. trade partners.

These include a 50-per-cent tariff on steel and aluminum, a 25-per-cent tariff on Canadian-made automobiles (with some carveouts) and a 35-per-cent blanket tariff for Canadian products that aren’t compliant with USMCA’s rules of origin.

Because of the USMCA carve-out, most Canadian goods continue to enter the U.S. tariff free. But key Canadian sectors, including steel, aluminum and automobiles are getting hammered by Mr. Trump’s sector-specific tariffs, known as Section 232 tariffs.

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In 2019, when former ambassador David MacNaughton resigned to become the head of Palantir’s Canadian operations, Ms. Hillman took over as acting ambassador before being appointed to the role full-time the following year.

“Through a period of transformation in the relationship, Ambassador Hillman has resolutely defended Canadian values and interests, while promoting a stronger future for workers who depend on stable trade, families who count on a safe and secure border, and businesses navigating new global uncertainty,” Mr. Carney said.