Canadian and U.S. negotiators are expected to convene once more on Tuesday to work towards a resolution to prevent impending U.S. tariffs on around $30 billion worth of Canadian goods set to come into effect shortly after midnight. Sources close to the matter revealed that Canada-U.S. Trade Minister Dominic LeBlanc may meet with U.S. Trade Representative Jamieson Greer, followed by Prime Minister Mark Carney engaging with U.S. President Donald Trump. As of midday ET, no specific time has been scheduled for these discussions, with the possibility of complications looming.
The impending tariffs, referred to as Section 338 tariffs in trade terminology, hinge on the extent to which Canada can secure favorable terms from the U.S. in exchange for its own set of concessions. LeBlanc is advocating for the removal of the Section 338 tariffs while also seeking reductions in existing Section 232 tariffs on key industrial products such as steel, aluminum, automobiles, and lumber.
Among the key points in the negotiations is the demand for the return of U.S. liquor to Canadian shelves and the elimination of Canada’s retaliatory tariffs on U.S. automobiles. Additionally, adjustments to the allocation of quotas within Canada’s supply-managed dairy sector are being pushed by the Trump administration. While the U.S. has indicated unwillingness to completely abandon its tariff strategy, there are indications that flexibility may be exhibited if certain U.S. demands are addressed by Canada.
Industry insiders note a disparity between Canadian expectations and American offers in sectors like autos and steel. The current U.S. offer proposes a reduction in tariffs on Canadian-made vehicles to a headline rate of 15%, down from the existing 25%. However, Canadian sources express dissatisfaction with these terms as they seek further reductions. The pressure is mounting on Prime Minister Carney to strike a deal with President Trump to normalize trade relations, particularly as various sectors, including the aluminum industry, are grappling with prolonged uncertainty.
While calls for an agreement to avert detrimental tariffs echo from entities like the U.S. Chamber of Commerce, there are opposing voices in sectors like dairy cautioning against excessive concessions. Intensifying demands from the U.S. government and American dairy groups to alter tariff-rate quotas (TRQs) in favor of U.S. dairy products have raised concerns in the Canadian dairy industry. Dairy Farmers of Canada President David Wiens emphasized the need to safeguard Canada’s food sovereignty amidst ongoing negotiations.