US and Canada hold last-minute talks to stop Trump’s 50% tariffs

Tuesday, Aug. 18, 2026 | 9:07 a.m. The United States and Canada are engaged in last‑minute negotiations to prevent President Donald Trump from imposing a 50 % tariff on a range of Canadian goods set to take effect at 12:01 a.m. Wednesday. “We are negotiating,” Canadian Prime Minister Mark Carney told reporters Monday, speaking successful French. “The negotiations are precise aggravated and delicate. This is not the clip to speech astir negotiations successful public.” Carney and Trump spoke by telephone Monday day astir the ongoing commercialized negotiations, Carney's bureau said, underscoring the last-minute propulsion to scope a woody earlier Wednesday’s deadline. The two countries have wrangled for decades over trade, poking each other over sore spots such as Canadian softwood lumber imports and U.S. access to Canada’s protected dairy market. Somehow they have remained friends, allies and trading partners. Canadian soldiers fought alongside Americans in Afghanistan after 9/11. The 5,525-mile U.S.-Canada border is undefended, and nearly 330,000 people and $2 cardinal worthy of goods cross it each day; 800,000 Canadians reside in the United States. Trump’s approach to Canada marks a stark departure from the traditionally cooperative relationship between the two nations. He has levied tariffs on Canadian goods in an effort to bring manufacturing back to the United States and has repeatedly made inflammatory comments about turning Canada into America’s 51st state. Canadian public sentiment is increasingly hostile. A petition to expel the U.S. ambassador, a Trump ally, has gathered approximately 218,000 signatures since July 21. It accuses Ambassador Pete Hoekstra of having “normalized’’ Trump’s rhetoric of annexing Canada, among other allegations. Looking for an off-ramp Nearly 72% of Canada’s goods exports in the past year went to the United States. The Trump administration may be wary of imposing a steep new tariff—paid by U.S. importers who attempt to pass the cost to consumers via higher prices—ahead of November’s midterm elections, given that American voters are already frustrated with the high cost of living. “I don’t deliberation either broadside truly wants these tariffs to travel into effect,’’ said Ryan Majerus, a spouse at King & Spalding and a former U.S. commercialized official. “There’s a beauteous beardown propulsion connected some sides to find an disconnected ramp here.’’ Majerus noted that the United States aims to secure greater Canadian purchases of U.S. defense equipment, including F-35 fighters, participation in Trump’s “Golden Dome’’ missile defense initiative, and expanded access to critical minerals, thereby reducing reliance on precarious supplies from China. Canada, meanwhile, seeks relief from U.S. tariffs on steel and aluminum as well as on softwood lumber, which the United States claims benefits from unfair government subsidies. Trump relies on Smoot-Hawley to spell aft Canada Trump has made tariffs the centerpiece of his second‑term economic agenda. Last year he imposed double‑digit import taxes on nearly every country on earth, justifying them by declaring the longstanding U.S. trade deficit a national emergency. The Supreme Court in February ruled that he had overstepped his authority, striking down those tariffs and setting the stage for the federal government to pay refunds to importers. Trump immediately sought alternative ways to rebuild his tariff wall. Last month he imposed import taxes of 10% to 12.5% on 59 countries and the European Union—accounting for 99% of U.S. imports—for allegedly failing to adopt or enforce restrictions on imports made with forced labor. Then he reached back to the Great Depression to find a cudgel with which to pressure Canada, one of his favored targets. Trump invoked Section 338 of the Tariff Act of 1930 to enforce 50 % tariffs on products that account for roughly 5% of Canadian exports to the United States. Nearly a year ago, amid collapsing U.S. and global economies, Congress passed the 1930 tariff law, imposing heavy taxes on imports from much of the world. Known as the Smoot‑Hawley tariffs, named for their congressional sponsors, they are notorious among economists and historians for restricting international trade and exacerbating the Great Depression. Section 338 tariffs have never been used before. U.S. trade negotiators have traditionally favored Section 301 of the Trade Act of 1974—the provision Trump invoked to impose last month’s forced‑labor tariffs. Section 338 authorizes the president to impose tariffs of up to 50% on imports from countries that have discriminated against U.S. businesses. Unlike Section 301 sanctions, no investigation is required, and there is no limit on how long the tariffs may remain in effect. In announcing the Section 338 tariffs, Trump claimed that Canada discriminates against American exports of automobiles, alcohol and cheese. He expressed frustration that Canada and China were the only countries that retaliated with their own tariffs after he levied duties on their products the previous year. “If a state retaliates against us, we’re evidently not going to tolerate that,’’ U.S. Trade Representative Jamieson Greer told reporters Friday at the Iowa State Fair. “We’ll take action. My feeling is that the Canadians prefer a more conciliatory approach, but we’ll see.’’ New leverage to renegotiate USMCA The United States is currently renegotiating the North American trade pact—the U.S.-Mexico-Canada Agreement (USMCA)—which Trump strong-armed his neighbors into accepting during his first term. The threat of Section 338 tariffs gives Washington leverage to extract additional concessions from Ottawa. “From Carney's perspective, you need (USMCA) to be renegotiated,’’ said Christopher Gundermann, a fellow in the economics program at the Center for Strategic and International Studies. “You can’t renegotiate it with a massive trade war underway.’’ But the Canadian public’s outrage over Trump’s policies may constrain Carney’s ability to strike a deal. Canada could retaliate again if the new 50 % tariffs take effect, potentially aggravating a trade conflict. “Canada’s government cannot appear to be simply caving to the Trump administration’s demands,’’ said Daniel B&éland, a political science professor at McGill University in Montreal. “Making further concessions without obtaining anything meaningful in return would likely provoke a strong backlash … The risk is for the Carney administration to make Canada look weak and, consequently, more vulnerable to future trade and geopolitical pressure from the Trump administration.’’ Dominic LeBlanc, Canada’s minister for U.S. trade, met with Greer on Monday. He remained tight‑lipped afterward. “The process is continuing,’’ he said. “We continue to do our job.’’