Canada, US in Talks on Trade Concessions to Avert New Tariffs

Canada and the United States are engaged in discussions over a potential agreement that would see Ottawa address a series of trade complaints from the Trump administration in return for Washington dropping its threat of new tariffs, according to a source familiar with the negotiations.

The talks come ahead of an August 19 deadline, when the US has said it will impose 50% tariffs on a broad range of Canadian imports unless progress is made on its concerns. Washington has already levied tariffs on various Canadian goods since President Trump returned to office.

As part of the proposed arrangement, Canada would remove tariffs on US automobiles, align with the American interpretation of dairy quota allocations, and work to restore US alcohol to store shelves in major provinces. In exchange, the US would reduce existing tariffs on Canadian steel and aluminum, the source said.

However, the source cautioned that there is no guarantee of a deal. One significant hurdle is that Ottawa cannot compel provinces to restock American alcohol, as that decision rests with provincial authorities.

Canadian officials have also signaled that public anger and potential provincial retaliation could limit their ability to continue negotiations if no agreement is reached before the deadline.

Any side agreements would be folded into the broader review of the US-Mexico-Canada trade pact, which was expected to conclude but now appears likely to extend into next year.

Canadian Minister Dominic LeBlanc, who oversees US-Canada trade relations, described a Thursday meeting with US Trade Representative Jamieson Greer as "constructive and detailed." The two sides are expected to meet daily until August 19. Both LeBlanc's office and Greer's office declined to comment on the specifics of the talks.

Relations between the two countries have been strained since Trump's return to the White House, marked by tariffs and his repeated calls for Canada's annexation.