According to a source familiar with the discussions, Canada is seeking to persuade Washington to withdraw its threat of imposing new tariffs in exchange for meeting some of the US administration’s trade demands. The two sides are expected to intensify negotiations ahead of the August 19 deadline.
The administration of US President Donald Trump imposed tariffs on various imports from Canada last year. In July, Washington announced that a 50% tariff would be imposed on a broad range of products starting August 19 if Canada failed to address US concerns over trade.
Under the potential agreement currently being discussed, Canada is expected to consider removing tariffs on US-made automobiles, reaching an understanding with Washington on the allocation of quotas for dairy products, and taking steps to allow American alcoholic beverages to return to stores in Canada’s major provinces.
In return, the United States is reportedly considering reducing the existing tariffs on Canadian steel and aluminum.
However, according to the source, it is not yet certain that the two sides will reach an agreement. One of the challenges for Ottawa is that decisions on allowing American alcoholic beverages to return to stores are made at the provincial rather than federal level.
Canada has also reportedly warned the US that public backlash and potential retaliatory measures by the provinces if the new tariffs take effect could complicate subsequent negotiations.
The potential agreement is expected to be considered in connection with the broader review process of the United States-Mexico-Canada Agreement (USMCA).
The offices of Canadian Federal Minister responsible for Canada-US trade Dominic LeBlanc and US Trade Representative Jamieson Greer did not comment on the matter. LeBlanc said Canadian officials held a “constructive and detailed” discussion with Greer on Thursday.
The two sides are expected to continue negotiations until August 19, the date set for the new tariffs to take effect.
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