US, Canada race to avert tariffs as deadline looms

The United States and Canada are locked in last-minute trade negotiations to avert sweeping new tariffs set to take effect early Wednesday, August 19, 2026. President Donald Trump and Canadian Prime Minister Mark Carney spoke by phone on Tuesday, August 18, as officials from both countries worked to bridge significant gaps on auto tariffs and other trade irritants before the deadline.

The Trump administration has threatened to impose 50 percent duties on approximately $28 billion worth of Canadian goods, including dairy products, cement, hockey sticks, and wine, using authority from the Tariff Act of 1930. The tariffs are scheduled to begin at 12:01 a.m. Washington time on August 19 if no agreement is reached. Negotiators have been meeting for weeks, but a deal remains elusive.

A central point of contention is the automotive sector. The U.S. has proposed reducing its existing 25 percent tariff on Canadian-made vehicles to 15 percent, with a structure that could lower the effective rate further for vehicles with higher levels of U.S. content. Canadian officials have described this offer as insufficient, arguing that a 15 percent levy on non-U.S. content would still be a heavy...