Canada races to avert looming 50% US tariffs on exports

Canadian officials are making a last-ditch effort to secure a reprieve from 50% tariffs that the United States is due to impose on a broad range of Canadian exports on Wednesday. The talks come as negotiations between the two countries enter the eleventh hour, with Ottawa trying to avoid a new trade shock affecting billions of dollars in goods. The threatened duties would apply to products including electronics, industrial machinery, furniture, dairy products and wine.

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The tariffs would cover about $20.2bn worth of goods, or roughly 5% of US imports from Canada, according to the Center for Strategic and International Studies. Canadian Prime Minister Mark Carney said on Monday that he expects to speak with US President Donald Trump before the deadline and described the negotiations as delicate and intense. Earlier this month, Carney also said the talks had been nasty, underlining how difficult the discussions have become.

Trump has said the measures are a response to what he sees as Ottawa's discriminatory treatment of US automobiles, dairy products and alcoholic drinks. The latest tariffs are notable because they would be applied under the first-ever use of Section 338 of the Tariff Act of 1930. That makes them different from earlier sector-specific duties, and they would hit goods that qualify for duty-free treatment under the United States-Mexico-Canada Agreement.

The potential impact is significant because the three-way trade deal has allowed an estimated 85% of US-Canadian trade to remain tariff-free, even after earlier US tariffs on sectors such as autos and steel. If the new duties take effect, they could affect businesses of all sizes across Canada, from flower bulb growers and beekeepers to makers of hockey equipment, as well as the cement, dairy and wine industries. Trade experts say tariffs of 50% would effectively price hundreds of Canadian goods out of the US market.

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The dispute also reflects the broader strain in the bilateral trade relationship since Trump returned to the White House. Canada has already faced a series of punitive trade measures, and the current standoff adds pressure on both governments to find a political and legal solution before the deadline. The fact that the threatened tariffs would override normal duty-free treatment under the continental trade pact has raised the stakes for exporters and policymakers alike.

What remains unclear is whether the two sides can reach a deal before Wednesday and, if not, whether the tariffs will be implemented in full or adjusted at the last minute. Ottawa's efforts are complicated by the need to bring provincial interests into the discussion, while talks continue behind closed doors. The next key development will be any direct contact between Carney and Trump and any formal announcement from either government before the deadline.

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