Canada and U.S. Race to Reach a Deal Before 50% Tariffs Take Effect Wednesday

OTTAWA -Canadian and American negotiators are working to put a framework for a trade deal in front of President Donald Trump as early as Monday, two days before new 50% tariffs on hundreds of Canadian goods are scheduled to take effect, CBC News reported.

The levies, imposed under Section 338 of U.S. trade law, are due Wednesday and would apply to roughly $20 billion to $28 billion in imports, according to Reuters. Unlike most of Trump's other tariffs, they would not exempt goods that comply with the United States-Mexico-Canada Agreement, the pact known in Canada as CUSMA. Energy, potash and certain critical minerals are excluded.

Dominic LeBlanc, Canada's minister responsible for U.S. trade, met U.S. Trade Representative Jamieson Greer in Washington on Thursday, his fourth meeting with Greer in three weeks. LeBlanc wrote on X afterward that negotiations were continuing and that Canada was advancing its interests. Canada's chief trade negotiator, Janice Charette, has been in Washington for weeks.

Greer said after Thursday's session that both Trump and Prime Minister Mark Carney would be presented with options, CBC reported. Items on the table include eliminating Canada's retaliatory tariffs on American vehicles, lifting provincial restrictions on U.S. alcohol sales and reworking dairy quotas. Sources told Global News that the administration is pushing to keep some tariffs on vehicles and auto parts that comply with the trade agreement.

A Canadian government source told Reuters on Thursday that Washington also wants an agreement before the deadline.

Canadian officials have signaled that the talks could stall if the tariffs land. Charette has described Wednesday as a cliff, and sources told The Globe and Mail that she warned her American counterparts the new levies could halt negotiations altogether.

David MacNaughton, a former Canadian ambassador to the United States, said this week that Greer lacks the authority to close a deal and that any durable settlement would require direct talks between Carney and Trump. He also cautioned Ottawa against piecemeal concessions that could invite further tariff action.

Canada's domestic economy has held up better than its trade file. The country added 75,100 jobs in July, and unemployment fell to 6.4%, its lowest level since July 2024.