Canadian Prime Minister Mark Carney spoke by phone with United States President Donald Trump on Monday as the two countries sought a last-minute agreement to prevent new 50 percent US tariffs from taking effect at midnight on Wednesday. Carney’s office confirmed the conversation on Tuesday but provided no further details.
The tariffs would apply to about $20bn worth of Canadian imports, including goods that qualify for preferential treatment under the United States-Mexico-Canada trade agreement. Business and trade officials warn that vulnerable sectors could face job losses and closures if the measures proceed.
Negotiations remain confidential
Carney told reporters on Monday that the negotiations were “very intense and delicate” and that it was not the time to discuss them publicly. Canadian officials had met for nearly two hours earlier on Tuesday with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.
The White House and the Office of the US Trade Representative had not immediately responded to requests for comment. The talks come as the two countries remain divided over existing US auto tariffs and other long-running disputes, including Canadian softwood lumber and US access to Canada’s protected dairy market.
Related coverage: Canadian PM Carney and US President Trump Commit to Strengthen Trade Negotiations.
Auto tariffs are a key sticking point
The two sides have discussed reducing US Section 232 tariffs on Canadian vehicles to 15 percent from 25 percent, with further reductions tied to the amount of US content in each vehicle, according to two unnamed sources cited in the source report.
Washington wants only US-produced content counted toward those deductions, while Canada wants qualifying content from across North America, including Canadian and Mexican parts. The source material says a Canadian auto official argued that even a 15 percent tariff would be too high for an industry with average profit margins of 6 percent.
Why businesses are watching the deadline
Trade experts and industry officials say the proposed tariffs could affect lumber, wine and dairy businesses, potentially leading to job losses and closures. Candace Laing, chief executive of the Canadian Chamber of Commerce, said billions of dollars in goods that were previously unaffected were now at significant risk.
More context: Canada faces a Wednesday deadline to stop new US tariffs.
The dispute could also complicate broader negotiations over the USMCA, which is in an annual review after the United States refused to renew it the previous month. Separately, new US Commerce Department rules require automakers exporting from Canada and Mexico to certify their current US-content levels, with vehicles needing recertification by September 30 to qualify for deductions in the annual cycle beginning December 1.
Also read: New US Tariffs May Be Imposed as Existing Trade Duties Near Expiration.
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