US, Canada hold last-minute talks to stop 50% U.S. tariffs
Deadline Looms as Washington and Ottawa Race to Avert 50% Tariff Blow
Tyunews.com – With the clock ticking toward 12:01 a.m. Wednesday, the United States and Canada are locked in final-hour negotiations to prevent a sweeping 50% tariff on roughly $20 billion in Canadian exports — a package spanning everything from hockey sticks to tongue depressors. Both governments appear eager to find an exit before the measure takes effect, though the stakes could not be higher for a bilateral relationship that has endured decades of friction.
"We are negotiating," Canadian Prime Minister Mark Carney told reporters Monday, speaking in French. "The negotiations are very intense and delicate. This is not the time to talk about negotiations in public."
A Relationship Strained to the Breaking Point
For generations, the two neighbors have clashed over trade irritants — Canadian softwood lumber flowing south, American attempts to crack open Canada's shielded dairy sector. Yet the bond held. Canadian troops stood shoulder-to-shoulder with U.S. forces in Afghanistan after September 11. The 5,525-mile shared border remains undefended, with approximately 330,000 people and $2 billion in merchandise crossing it daily. Some 800,000 Canadians reside within American borders.
President Donald Trump's confrontational posture toward Ottawa represents a sharp rupture from that cooperative tradition. His administration has layered tariffs onto Canadian goods in an effort to repatriate manufacturing, while Trump himself has repeatedly floated the notion of folding Canada into the Union as a 51st state. Canadian frustration has reached a fever pitch: a petition demanding the removal of Ambassador Pete Hoekstra — a Trump ally accused of having "normalized" the annexation rhetoric — has amassed nearly 218,000 signatures since July 21.
Why Both Sides Want an Off Ramp
Nearly 72% of Canadian merchandise exports flowed to the United States last year, making the tariff threat an existential commercial concern for Ottawa. On the American side, the Trump administration faces its own calculus: tariffs are paid by U.S. importers, who typically pass costs onto consumers through higher prices — an unpopular proposition ahead of November's midterm elections, when voters are already chafing under elevated living costs.
"I don't think either side really wants these tariffs to come into effect," said Ryan Majerus, a partner at King & Spalding and a former U.S. trade official. "There's a pretty strong push on both sides to find an off ramp here."
According to Majerus, Washington's negotiating checklist includes securing Canadian purchases of American military hardware — notably F-35 fighter jets — enrolling Ottawa in Trump's "Golden Dome" missile-defense architecture, and expanding U.S. access to critical minerals so as to diminish dependence on supply chains controlled by geopolitical rival China. In return, Canada seeks relief from existing American duties on steel, aluminum, and softwood lumber, which Washington labels as benefiting from unfair government subsidies.
The Unprecedented Legal Weapon
Tariffs have become the centerpiece of Trump's second-term economic program. Last year he levied double-digit import taxes on virtually every nation, branding the persistent U.S. trade deficit a national emergency. In February, however, the Supreme Court ruled he had exceeded his statutory authority, voiding those duties and opening the door to refunds for importers. Trump promptly pivoted to alternative legal instruments.
Last month he imposed duties of 10% to 12.5% on 59 countries plus the European Union — a bloc representing 99% of American imports — citing alleged failures to restrict or enforce bans on goods produced with forced labor. Then, turning to a tool nearly a century old, he invoked Section 338 of the Tariff Act of 1930 to impose the 50% levy on products constituting roughly 5% of Canadian exports to the United States.
That 1930 statute, enacted amid the collapse of global economies, imposed steep duties on imports worldwide. Known as the Smoot-Hawley tariffs after their congressional sponsors, they are widely cited by economists and historians as having choked international commerce and deepened the Great Depression. Section 338 itself has never been deployed. U.S. trade negotiators have traditionally preferred Section 301 of the Trade Act as their instrument of choice.
Related Reading
Frequently Asked Questions
What is US Canada hold last minute talks?US Canada hold last minute talks is the main topic of this guide. The article explains the context, practical details, and next steps readers should understand.
Why does US Canada hold last minute talks matter?US Canada hold last minute talks matters because readers are looking for a useful answer, not just a short summary. Good content should match search intent and help them decide what to do next.