Canada and US in Last-Minute Talks to Avoid New Tariffs

Aug 19, 2026

86 min

Aug 19, 2026 00:30

Trump, Carney talk as Canada seeks to hold off 50% US tariffs

## Urgent Discussions Between Leaders

Canadian Prime Minister Mark Carney and US President Donald Trump engaged in critical discussions on Tuesday to prevent the implementation of new US tariffs on Canadian goods. These tariffs, set to take effect at midnight, would impose a 50% duty on products such as wine, hockey sticks, and cement.

## Potential Economic Impact

The tariffs target approximately 5.5% of Canada's exports to the US, valued at around $20 billion. While the overall economic impact on Canada is considered modest, central Canada's manufacturing sector could face significant challenges.

## Negotiations and Concessions

Canadian negotiators have been actively working in Washington to secure a deal that would prevent the tariffs and alleviate existing sector-specific duties affecting industries like auto, steel, and aluminum. Reports suggest Canada might offer concessions, such as increasing US alcohol and wine availability in Canadian markets.

## Political Dynamics

The negotiations are part of broader discussions on renewing the US-Mexico-Canada Agreement (USMCA). Former US commerce official Christopher Padilla noted that the Trump administration might use the threat of tariffs to gain early concessions from Canada. However, even if a trade agreement is reached, Trump could reject it due to other political concerns, such as Canada's economic relations with Europe or China.

## Legal and Trade Considerations

The new tariffs are based on an untested legal provision, following the US Supreme Court's earlier rejection of many of Trump's global tariffs. The duties will not affect Canadian energy or potash but will impact goods covered by the USMCA. US trade envoy Jamieson Greer stated that the tariffs aim to hold Canada accountable for its retaliatory actions against the US, including removing US alcohol products from shelves and favoring European dairy imports.

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