Canada-US intensify trade talks ahead of tariff deadline

Canada and the United States resumed trade negotiations in Washington on Friday morning, with a midnight deadline looming for the imposition of 50 percent tariffs on C$30 billion (US$22 billion) worth of Canadian goods. Both sides have indicated they are close to an agreement. US President Donald Trump said on Wednesday that a ‘very fair’ deal had been reached, but negotiators continued working at pace to finalise terms before the deadline. Trump announced the tariffs as retaliation for Canadian tariffs on US goods, which had themselves been imposed in response to earlier US tariffs.

On the Canadian side, media reports earlier this week quoted Prime Minister Mark Carney as saying only that ‘significant progress has been made’. Sources familiar with the negotiations told Canadian media that the deal would cut US tariffs on Canadian steel and aluminium by half, from 50 percent to 25 percent.

To secure that concession, Canadian negotiator Dominic LeBlanc must address three US trade complaints. First, the automotive sector, which the US government considers burdened by Canadian taxes and tariffs. Second, the US wants access to Canada’s dairy market, objecting to strict quotas under Canada’s supply management system. Third, the US wants an end to the ban on alcohol sales imposed when several Canadian provinces pulled American liquor products from store shelves in retaliation for earlier US tariffs.

The boycott has hurt American alcohol producers. Carney has received assurances, albeit reluctantly, from provincial premiers that American alcohol products will return to store shelves. Quebec, however, has stipulated that the trade agreement must deliver an overall positive benefit before it takes that step.