Canadian Prime Minister Mark Carney held a phone call with U.S. President Donald Trump on Monday regarding the ongoing trade negotiations. Carney’s office confirmed the conversation but did not disclose further details.
The two sides are trying to reach an agreement before the new U.S. tariffs are due to take effect at midnight on Wednesday.
According to Reuters, the new duties would cover approximately $20 billion worth of imports and would apply regardless of whether Canadian goods qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA).
Until now, USMCA provisions have largely shielded Canadian goods from previous U.S. tariffs.
Business representatives and trade experts warn that the new tariffs could hit certain sectors of the Canadian economy particularly hard.
Among the most vulnerable industries are lumber, wine and dairy. Potential consequences include job losses, business closures and weaker access to the U.S. market for Canadian exporters.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, said billions of dollars in trade that had previously been unaffected were now at risk.
According to her, Canadian businesses have been operating under significant uncertainty for more than a year, delaying hiring, investment and expansion.
The renewed trade dispute could also complicate broader negotiations over the future of the USMCA.
Canada’s minister responsible for trade relations with the United States, Dominic LeBlanc, and chief trade negotiator Janice Charette have been in Washington since last week.
On Monday, they held a nearly two-hour meeting with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.
Among the grievances repeatedly raised by the U.S. side are Canada’s retaliatory tariffs imposed in response to earlier U.S. duties, some provinces’ refusal to stock U.S. liquor and Canada’s dairy supply management system.
The latter traditionally regulates domestic production volumes and access for imported products to the Canadian market.
According to Reuters sources, one of the main sticking points in the negotiations remains U.S. tariffs on Canadian vehicles.
The two sides have discussed reducing Section 232 tariffs on Canadian vehicles from 25% to 15%, with further reductions depending on the share of U.S.-made content in a particular vehicle.
However, disagreement has emerged over how that share should be calculated.
Washington insists that only the value of components manufactured in the United States should be excluded from the tariff calculation.
Canada, by contrast, wants the calculation to exclude all North American content — meaning not only U.S. components, but also Canadian and Mexican parts.
The issue is particularly important for the automotive industry, where supply chains across the United States, Canada and Mexico are deeply integrated.
Another difficult issue remains Canada’s dairy supply management system.
The U.S. has long criticised the model, arguing that it restricts access to the Canadian market for American producers.
Against the backdrop of the latest negotiations, dairy trade has once again become one of Washington’s arguments in favour of increasing trade pressure.
For Canada, however, the supply management system is an important part of domestic agricultural policy, meaning that any concessions in this area could have significant consequences for local producers.
According to a Canadian government source, Ottawa is considering several possible responses if the new tariffs take effect.
These include government support for the sectors most severely affected, as well as the potential suspension of bilateral trade negotiations.
At the same time, the Canadian side still expects Washington to remain interested in reaching a compromise before the deadline.
The coming hours are therefore critical for trade relations between the two countries. If no agreement is reached, the new 50% tariffs could significantly broaden the trade dispute and affect sectors that until now had largely been protected under the USMCA.
PigUA.info, based on materials from thepigsite.com