U.S. and Canada negotiate to avert 50% tariffs on $20 billion of goods
Washington and Ottawa are holding last-minute talks to avoid the implementation of 50% tariffs on Canadian products worth about $20 billion, which were slated to take effect at midnight on Wednesday.
The United States is in urgent negotiations with Canada to prevent the activation of 50% tariffs on roughly $20 billion of Canadian exports, including items such as hockey sticks and medical supplies. The tariffs, announced by President Donald Trump under Section 338 of the 1930 Tariff Act, would have taken effect at 12:01 a.m. Wednesday.
Canadian Prime Minister Justin Trudeau said the talks were "very intense and delicate" and emphasized that the negotiations should not be conducted publicly. U.S. Trade Representative Katherine Tai indicated that the United States seeks greater access to Canadian critical minerals and increased sales of U.S. defense equipment, while Canada is looking for relief from existing tariffs on steel, aluminum and softwood lumber.
The proposed tariffs would raise the overall duty on the targeted Canadian goods to 50%, a level not previously used under the 1930 law. The move follows earlier 10% tariffs that remain in place for most Canadian imports that comply with the U.S.-Mexico-Canada Agreement (USMCA).
Industry experts said both sides have a strong incentive to find an "off-ramp" to avoid the tariffs, noting that higher costs would likely be passed on to U.S. consumers ahead of the November midterm elections. Negotiations continue as both governments seek a mutually acceptable resolution.