Canada-U.S. trade talks face fresh hurdles ahead of August 19 tariff deadline

Canadian and U.S. officials have been holding daily negotiations in Washington to narrow their differences, Reuters reported.

The talks come as President Donald Trump has threatened to impose 50% tariffs on a broad range of Canadian imports if an agreement is not reached.

The latest round of negotiations has raised concerns in Ottawa. CBC News reported, citing two sources, that Canadian officials were dissatisfied with a new U.S. proposal presented Tuesday, saying it did not offer as much tariff relief as Canada had sought.

The U.S. proposal would lower some tariffs, but Canadian officials are seeking broader relief from duties imposed by Washington, according to Reuters.

Neither U.S. Trade Representative Jamieson Greer nor Canadian Minister responsible for U.S. trade Dominic LeBlanc publicly commented on the reported proposal.

The two countries are seeking an agreement before August 19, when the threatened 50% tariffs could take effect.

Reuters reported that the proposed levies could affect nearly US$20 billion worth of Canadian imports, equivalent to about 5.2% of U.S. imports from Canada in 2025.

The tariff threat has intensified negotiations between Ottawa and Washington, with Canadian officials seeking relief from existing U.S. duties while working to address American concerns over Canadian trade policies.

Earlier, Reuters reported that Canada was considering concessions on U.S. auto tariffs, dairy-market access and the return of American alcohol to store shelves in some provinces in exchange for tariff relief on Canadian steel and aluminium.

However, some issues remain politically and constitutionally complicated. Reuters reported that Ottawa cannot directly order American alcohol back onto store shelves because liquor distribution falls under provincial jurisdiction.

Despite the disagreements, negotiations have continued. A Canadian government source told Reuters on Thursday that talks were progressing positively and that Washington also had an interest in reaching an agreement before the August 19 deadline.

Canadian Minister Dominic LeBlanc has held several meetings with U.S. Trade Representative Jamieson Greer in recent weeks. Reuters reported that the latest discussions marked their fourth meeting in three weeks.

The negotiations come against the backdrop of broader uncertainty over the future of the United States-Mexico-Canada Agreement (USMCA), which governs much of North American trade.

For Canadian exporters, failure to reach an agreement before the deadline could mean significantly higher costs and further disruption to cross-border trade, adding pressure on both governments to reach a compromise.