US and Canada Race to Avert New Tariffs as Deadline Looms
Negotiators scramble to find a truce before 50% US tariffs on $20 billion of Canadian goods take effect Wednesday.
With just hours to go before a midnight deadline, the United States and Canada are locked in intense negotiations to prevent a new round of tariffs that would hit $20 billion worth of Canadian products, from hockey sticks to tongue depressors.
Canadian Prime Minister Mark Carney confirmed the talks on Monday, describing them as "very intense and delicate" while declining to discuss details publicly. The two sides are seeking an off-ramp that would avoid the 50% duties, which President Donald Trump has threatened to impose under a rarely used provision of the Tariff Act of 1930.
The move marks a sharp escalation in a trade relationship that has historically been defined by cooperation. The two neighbors share the world's longest undefended border, with nearly 330,000 people and $2 billion in goods crossing it daily. Yet Trump has repeatedly antagonized Ottawa, floating the idea of making Canada the 51st state and imposing tariffs in a bid to reshore manufacturing.
Canadian public sentiment has soured. A petition calling for the expulsion of U.S. Ambassador Pete Hoekstra has gathered nearly 218,000 signatures, accusing him of normalizing Trump's annexation talk.
Trade experts say neither side wants the tariffs to take effect. Ryan Majerus, a former U.S. trade official now at King & Spalding, noted a strong push on both sides to find a compromise. Washington is reportedly seeking Canadian purchases of U.S. military equipment, participation in missile defense, and greater access to critical minerals. Ottawa, in turn, wants relief from existing tariffs on steel, aluminum, and softwood lumber.
The tariff threat is part of a broader renegotiation of the US-Mexico-Canada Agreement. Analysts say Canada needs a stable trade environment to negotiate effectively, but Carney faces domestic pressure not to appear weak.
"The work is continuing," said Canadian trade minister Dominic LeBlanc after meeting with U.S. Trade Representative Jamieson Greer on Monday. He offered no further details.
If the tariffs take effect, Canada could retaliate again, potentially deepening a trade fight that has already strained relations between the longtime allies.