Canada tries to negotiate with the US before 50% tariffs take effect

Canada has intensified negotiations with the US, attempting to conclude a trade agreement before August 19, when new US tariffs of 50% are set to take effect on a number of Canadian goods.

According to Bloomberg, Canadian negotiators continue to seek a compromise with the administration of US President Donald Trump. Ottawa warns that the imposition of new tariffs could open a more severe stage of the trade conflict between the two countries.

Earlier, Canadian Prime Minister Mark Carney described the talks with Washington as challenging and stated that the country is prepared to increase retaliatory measures if an agreement cannot be reached by the established deadline.

Trump signed the decision on the new tariffs on July 20. According to White House documents, the additional 50% tariff will become effective at 00:01 Eastern Time on August 19.

The measures apply to certain categories of Canadian imports, relating among others to automobiles, alcoholic beverages, and dairy products. The list of goods includes various products — from wine and certain automotive goods to a range of consumer products.

At the same time, the new 50% tariffs do not apply to some important items of Canadian exports, including energy carriers, potash fertilizers, certain critical minerals, and goods already subject to other US tariff regimes.

The White House justifies the new restrictions on the grounds that Canadian trade policy allegedly creates an uneven playing field for American companies. Ottawa disagrees with this assessment and states that it intends to defend Canadian workers, producers, and businesses.

Bilateral trade relations are already strained by existing restrictions. Canada maintains retaliatory tariffs on US steel, aluminum, and automobiles, while the US applies separate duties on a number of strategic Canadian goods.

The negotitations are taking place against the backdrop of a broader review of the economic relationship between the US, Canada, and Mexico. The American market remains a key export destination for Ottawa, so reaching an agreement before August 19 could avert a further escalation of the trade conflict.

Materials from: Bloomberg, White House, Government of Canada