US, Canada Negotiators Race Against New Tariff Deadline; Autos a Key Hurdle

U.S. and Canadian trade officials met on Wednesday under a tight deadline to finalize a trade agreement and avert a new 50% U.S. tariff on $20 billion worth of Canadian goods. The talks resumed after President Donald Trump announced a three-day pause on the planned duties, setting a new deadline for 12:01 a.m. ET on Saturday.

High-Stakes Negotiations

Canadian Minister Dominic LeBlanc and chief trade negotiator Janice Charette met with U.S. Trade Representative Jamieson Greer in Ottawa, LeBlanc's office confirmed. The renewed discussions follow a statement from President Trump on Tuesday suggesting a deal was reached pending final documentation.

However, Canadian Prime Minister Mark Carney offered a more measured assessment, acknowledging "substantial progress" but emphasizing that "important work" remains. If no agreement is reached by the deadline, the new tariffs would apply to certain Canadian goods regardless of their status under the U.S.-Mexico-Canada trade agreement (USMCA).

Auto Tariffs Remain Sticking Point

The primary obstacle in the talks appears to be the level of U.S. tariffs on Canadian auto imports. According to two auto executives cited by Reuters, Canada is pushing to reduce the current 25% U.S. tariff on its vehicles and parts to 10%.

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The U.S. has reportedly offered a reduction to 15%. Other unresolved auto-related issues include the rules of origin, specifically how regional content value is calculated for tariff deductions, and whether any tariff reductions will apply to all vehicles or only passenger cars and trucks.

Broader Concessions and Context

A White House proclamation stated that Canada had committed to removing what Washington views as discriminatory treatment of U.S. alcoholic beverages, cheese, and motor vehicles. The Canadian government has not publicly confirmed these commitments or detailed its own concessions.

Public sentiment in Canada appears firm, with a Leger poll on Wednesday finding that 56% of Canadians want their government to make no further concessions. Separately, President Trump mentioned in a social media post that the canceled Keystone XL oil pipeline "may be awoken from the grave," though it remains unclear if this is a formal component of the trade negotiations.