New U.S. tariffs target about $20 billion worth of imports and could lead to job losses and business closures.
Published August 18, 2026
Canadian Prime Minister Mark Carney met twice this week with US President Donald Trump in a bid to rush a last-minute deal to avoid new 50% tariffs going into effect at midnight on Wednesday, Carney’s office said.
“Prime Minister Carney and President Trump met again this afternoon to discuss ongoing negotiations,” Carney’s office said, without providing further details.
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Tuesday’s call followed Monday afternoon’s call, but details were not released.
“We are negotiating, and the negotiations are very intense and sensitive,” Carney told reporters on Monday. Now is not the time to talk about negotiations in public. ”
The new U.S. tariffs will cover about $20 billion worth of imports and will apply regardless of whether Canadian products qualify for preferential treatment under the U.S.-Mexico-Canada Trade Agreement. The agreement has protected much of Canada’s industry from previous U.S. tariffs.
Spokespeople for the White House and the Office of the U.S. Trade Representative did not respond to requests for comment.
The two countries have been at war over trade for decades, pitting each other over thorny issues such as Canadian softwood lumber imports and U.S. access to Canada’s protected dairy market. Still, they managed to maintain friendly relations.
The situation has changed dramatically during President Trump’s second term, using tariffs as a major economic policy tool to bring manufacturing back to the United States.
Challenges include existing U.S. auto tariffs, Reuters reported, citing two unnamed sources.
The two countries discussed reducing U.S. Section 232 duties on Canadian cars from 25% to 15%, with further reductions based on the amount of U.S. content in each vehicle, sources said.
But the two countries also disagree on how content should be counted, with Washington calling for only content produced in the United States to be counted, and Canada calling for all North American content to be counted, including parts from Canada and Mexico.
A Canadian auto official told Reuters that even a 15% tariff would be too high with auto profit margins averaging just 6%, adding that about half the value of cars made in Canada come from the United States and the tariffs would hurt companies in both countries.
The U.S. Department of Commerce announced new rules early Tuesday for automakers exporting from Canada and Mexico to certify their current level of U.S. content for duty credits, reducing the complex process from twice a year to once a year. However, automakers must recertify their vehicles to U.S. specifications by Sept. 30 to claim the credit in the new annual cycle starting Dec. 1, according to a notice in the Federal Register.
Billions of dollars are at risk
Trade experts and industry officials say new tariffs could lead to job losses and business closures in vulnerable sectors such as timber, wine and dairy. They also warn that the dispute could complicate broader negotiations on the United States-Mexico-Canada Agreement (USMCA), which the United States refused to renew last month and is currently under annual review.
“There are billions of products a year that were previously unaffected but are now at risk of being significantly impacted,” said Candace Raine, CEO of the Canadian Chamber of Commerce.
“For more than a year, companies have taken aggressive actions to refrain from hiring, investing and growing in Canada,” she said.
On Monday, Canadian officials spoke for nearly two hours with U.S. Trade Representative Jamison Greer and Secretary of Commerce Howard Lutnick.
Mr. Greer has repeatedly cited Canadian tariffs that followed initial U.S. tariffs, some states’ refusal to stockpile American alcoholic beverages, and Canada’s dairy supply management system as among the U.S.’s grievances.
