US and Canada Engage in Last-Minute Trade Talks Ahead of Tariff Deadline
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| USDCAD | — | — |
- US Trump officially pauses 50% tariffs for 3 days, announces tentative deal.
- Canadian equities climb as Trump announces tentative deal, averting 50% tariffs.
- Tentative deal includes dairy concessions; Keystone XL revival eyed.
US and Canadian negotiators are engaged in renewed discussions as a midnight deadline approaches for the United States to impose 50% tariffs on a range of Canadian imports. Despite these ongoing efforts, Canada’s chief trade negotiator indicated that substantial work is still required to reach an agreement. Earlier reports noted that discussions between President Donald Trump and Prime Minister Mark Carney had not resulted in a resolution to delay the planned tariffs, contributing to market uncertainty. Both sides are expected to meet again in a final push to resolve the dispute before the deadline.
A potential interim trade deal between the US and Canada is reportedly on President Trump’s desk, with Trump expected to decide whether to accept it before broader USMCA talks or allow a planned 50% tariff on certain Canadian goods to take effect at midnight on August 19. The emerging package reportedly includes Canadian concessions on dairy tariffs. Negotiations between US President Donald Trump and Canadian Prime Minister Mark Carney are ongoing, just hours before the US is set to impose the 50% tariffs on items including hockey sticks and wine on Wednesday. Prime Minister Carney described the talks as “very intense and delicate.”
US President Trump has reportedly paused the planned 50% tariffs on certain Canadian goods for a “three day period”. This development comes as talks continue, with a potential breakdown and imposition of tariffs risking sectors including lumber, wine, dairy, and autos. The auto sector is highlighted as a significant pressure point, with industry warnings suggesting that even a 15% tariff would be unsustainable against average profit margins of just 6%. Furthermore, tariffs are expected to also hurt American manufacturers, given that roughly half the value of a Canadian-built vehicle originates in the US. A breakdown in talks also carries a knock-on risk to broader USMCA negotiations.
US President Donald Trump has officially announced a “three-day period” pause on the planned 50% tariffs against Canada, stating that the two nations “have a deal” subject to the finalization of documents. This development follows overnight negotiations with Canadian Prime Minister Mark Carney. Trump also indicated that the Keystone XL pipeline may be “awoken from grave” as part of the agreement.
Following the announcement of a three-day pause on planned tariffs, Canadian equities climbed in early trading on Wednesday. US President Trump announced the tentative deal less than two hours before the 50% tariffs on Canadian goods were scheduled to take effect. Businesses are reportedly warning that the threat of these tariffs, covering items such as wine and hockey sticks, is already taking a toll.