U.S. and Canada negotiate to avert 50% tariffs on Canadian exports
U.S. and Canadian officials are holding intensive talks to prevent the implementation of 50% tariffs on about $20 billion of Canadian goods, a move that could affect a range of products from hockey sticks to medical supplies.
Washington and Ottawa are engaged in last-minute negotiations aimed at avoiding a new round of tariffs that President Donald Trump has threatened to impose on roughly $20 billion of Canadian exports. The proposed duties, set at 50%, would take effect at 12:01 a.m. on Wednesday and cover items such as sports equipment and medical devices.
Canadian Prime Minister Justin Trudeau told reporters that the talks are “very intense and delicate,” emphasizing that public discussion of the negotiations is premature. U.S. Trade Representative Katherine Tai indicated that the United States is seeking concessions, including greater Canadian purchases of U.S. defense equipment and increased access to critical minerals, while Canada is looking for relief from existing U.S. tariffs on steel, aluminum and softwood lumber.
Analysts note that both sides have incentives to reach an agreement before the November midterm elections, when higher consumer prices could become politically sensitive. A partner at King & Spalding, former U.S. trade official Ryan Majerus, said, “I don’t think either side really wants these tariffs to come into effect. There’s a pretty strong push on both sides to find an off-ramp here.”
The tariffs would be imposed under Section 338 of the Tariff Act of 1930, a provision that allows the president to levy duties of up to 50% without a prior investigation. This is the first use of that authority, which differs from the Section 301 tool traditionally employed for trade disputes. The move follows recent tariffs on 59 countries for alleged forced-labor violations and reflects the administration’s broader trade agenda.
U.S. officials have warned that retaliation by Canada would not be tolerated, while Canadian officials have stressed the need to avoid appearing to concede to U.S. demands without securing meaningful benefits. Canada’s Minister for U.S. Trade, Dominic LeBlanc, said after meeting with U.S. officials that “the work is continuing” and that his team remains committed to protecting Canadian interests.
The negotiations occur as the United States seeks to renegotiate the US-Mexico-Canada Agreement, using the threatened tariffs as leverage for new concessions. Canadian scholars caution that any perceived capitulation could provoke domestic backlash and weaken Canada’s negotiating position in future trade and geopolitical matters.