Top trade negotiators from Canada and the United States met for a third consecutive day in Washington, DC, on Friday, trying to finalise a deal before threatened US tariffs begin at 12:01am Eastern time on Saturday, or 04:01 GMT. The tariffs would impose 50 percent import taxes on about $20bn worth of Canadian goods.
The tariffs were paused earlier in the week, and Canadian and US officials have signalled that the talks are close but unfinished. Any agreement would not remove all US tariffs on Canadian goods, according to Vina Nadjibulla, co-founder and CEO of the Centre for Strategic Statecraft, a Canadian nonpartisan policy think tank.
What the negotiators are discussing
Canadian Trade Minister Dominic LeBlanc met US Trade Representative Jamieson Greer for more than three hours on Thursday. LeBlanc said the countries were “very close” to an agreement but that more work was needed; he did not speak to reporters when he arrived for Friday’s talks.
Sources cited in the source report said a potential agreement could reduce the top-line US tariff on Canadian-built vehicles from 25 percent to 15 percent and cut tariffs on Canadian steel and aluminium to 25 percent. The details of which goods would be exempt, and by how much, could also affect negotiations over the United States-Mexico-Canada trade pact.
Related coverage: Canadian PM Carney and US President Trump Commit to Strengthen Trade Negotiations.
How the dispute reached the deadline
The latest tariff threat was introduced in late July in response to what US President Donald Trump describes as Canada’s “discriminatory treatment of American products”. He postponed the deadline from Wednesday to Saturday and warned that the 50 percent tariffs would take effect if the two sides failed to reach a deal.
The dispute follows 18 months of strained trade relations. In 2025, early in Trump’s second term, the United States imposed tariffs on key Canadian imports, prompting Ottawa to respond with countermeasures. Trump has since introduced new tariff threats periodically.
Why a deal could be difficult for Canada
Any agreement would have to be accepted domestically by Prime Minister Mark Carney, Canadian voters and the premiers who lead the country’s 10 provinces and three territories. The impact of the tariffs differs across regions, and Ontario, a major steel and aluminium producer, wants those tariffs removed.
More context: Trump announces US-Canada trade agreement as details remain unfinished.
A Leger Opinion poll published on Wednesday found that 56 percent of Canadians did not want Carney to make further concessions. Carney has urged major provinces to reverse bans on sales of US alcohol, which Washington considers a significant irritant. Manitoba Premier Wab Kinew has argued that Canada should resist concessions.
What happens if talks continue
Nadjibulla said a deal appeared likely before the current extension expired, though another extension could send negotiations into the following week. She described a possible agreement as a detente rather than the removal of all tariffs.
Canada sends about 70 percent of its exports to the United States, making it vulnerable to punitive US trade measures. Rachel Ziemba of the Center for a New American Security said Canada needed an agreement Carney could defend at home, while the higher US tariffs were also contributing to inflation for American consumers.
Also read: Carney and Trump hold talks as 50% US tariff deadline nears.
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