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U.S., Canada race to avoid 50% tariffs

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The United States and Canada are working toward a trade agreement that could prevent President Donald Trump from imposing 50% tariffs on some Canadian products beginning early Wednesday.

Negotiators have made progress toward a possible deal, although significant differences remain and discussions have been contentious, according to The Washington Post.

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The tariffs, scheduled to take effect at 12:01 a.m. Wednesday, would apply to about 5% of the $382 billion in Canadian goods the United States imported last year. Potentially affected products include hockey sticks, wine and cement.

A possible agreement could include Canadian tariff concessions and commitments involving energy, defense and critical minerals. In exchange, the United States could shelve the threatened 50% tariffs and ease existing tariffs on Canadian steel and aluminum.

Canada is seeking relief from 25% U.S. national security tariffs on steel and aluminum, while the two countries are also discussing Canadian participation in the proposed Golden Dome missile defense system, purchases of F-35 fighter jets and greater U.S. access to Canadian critical minerals.

The dispute is the latest in a series of trade clashes that have strained relations between the longtime allies.

Canada previously responded to U.S. tariffs with duties on American automobiles and other products, while several Canadian provinces removed U.S. wines and spirits from government-run stores. Trump subsequently invoked a rarely used provision of a 1930 trade law to threaten the new 50% tariffs.

Canadian Prime Minister Mark Carney has indicated Canada could retaliate again if the tariffs take effect.

Beyond avoiding another round of tariffs, an agreement could clear the way for formal negotiations over changes to the U.S.-Mexico-Canada Agreement, the trade pact negotiated during Trump’s first term.

Failure to reach a deal could further disrupt highly integrated North American industries, particularly automobile manufacturing, while raising costs for businesses and consumers on both sides of the border.

Source: Washington Post

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