OTTAWA, Canada — US-Canada trade negotiators met on Wednesday as the two countries raced to resolve outstanding issues before a new tariff deadline, with automobile duties emerging as a major obstacle to a potential agreement.
- New US tariffs on about $20 billion of Canadian imports are scheduled to begin at 12:01 a.m. ET Saturday if no agreement is finalized.
- Automotive tariffs remain one of the key unresolved issues in the negotiations.
- Canada is seeking a reduction of the US auto tariff to 10%, while Washington has offered 15%, according to sources.
- Trump has also raised the possibility of reviving the long-abandoned Keystone XL pipeline.
US-Canada Trade Talks Enter Critical Phase
Canadian minister responsible for US trade Dominic LeBlanc and Canada’s chief trade negotiator Janice Charette met US Trade Representative Jamieson Greer on Wednesday, according to a statement from LeBlanc’s office.
The meeting followed President Donald Trump’s decision to pause planned 50% tariffs on certain Canadian goods for three days. Trump said on Tuesday that the countries had reached a deal subject to finalizing documents, while Canadian Prime Minister Mark Carney said substantial progress had been achieved but important work remained.
The new deadline is 12:01 a.m. ET on Saturday. If negotiations fail to produce an agreement, the threatened tariffs would cover roughly $20 billion of Canadian imports and would apply even when goods qualify for preferential treatment under the US-Mexico-Canada trade agreement.
Auto Tariffs Remain Key Sticking Point
The treatment of Canadian-made vehicles and auto parts is among the most sensitive issues still under discussion. The United States currently applies a 25% tariff on imported Canadian vehicles and parts.
Two auto executives told Reuters that Canada is seeking to bring the rate down to 10%, while the US has offered a 15% rate. For comparison, vehicles and parts from Japan, the European Union and South Korea face a 15% US tariff, while the rate for UK goods is 10%.
Negotiators are also discussing how regional content should be treated when calculating tariffs. One unresolved question is whether the value of components originating in Canada, Mexico or the United States can be deducted, or whether only US components will qualify for deductions.
Canada also wants any reduction to cover medium- and heavy-duty vehicles as well as passenger cars and trucks. It remains unclear whether the auto issue will be settled during the current talks or carried into broader USMCA negotiations.
Canada Faces Pressure Over Trade Concessions
A White House proclamation said Canadian officials had committed to removing what Washington considers discriminatory or unequal treatment of US alcoholic beverages, cheese and motor vehicles.
Canada has not publicly confirmed those commitments or detailed concessions it may have offered. A Leger poll released Wednesday found that 56% of Canadians want Carney to make no further concessions to the United States.
“This limbo state is not anyone’s preferred outcome — time is of the essence.”
Candace Laing, CEO of the Canadian Chamber of Commerce, made the comment as businesses await clarity over the future of cross-border trade.
US Seeks Broader Trade Commitments
Greer said in a Tuesday social media post that the proposed agreement would include comprehensive market access for American goods, economic security commitments and digital trade alignment, along with other provisions.
However, neither side has publicly released the full details of the potential agreement. Charette’s office told Canada’s Prime Minister’s Advisory Committee on Canada-US Economic Relations that the sensitive nature of the talks prevented it from providing further details.
Trump Raises Keystone XL Pipeline Again
Trump also mentioned the long-abandoned Keystone XL oil pipeline while announcing the tariff pause. He said the project “may be awoken from the grave”, without explaining whether the pipeline formed a significant part of the current negotiations.
The proposed pipeline was designed to transport Canadian crude from Alberta to US refineries. Former President Joe Biden canceled the project in 2021 following years of environmental and Indigenous opposition.
Canadian Prime Minister Mark Carney had said in October that reviving the pipeline could potentially contribute to closer US-Canada energy cooperation.
What Happens Before Saturday’s Tariff Deadline?
The negotiators now have only a short window to settle the remaining disputes and finalize any agreement. The auto tariff structure, treatment of regional content and the scope of any vehicle tariff reductions remain among the issues that could determine whether a deal is completed before the deadline.
Frequently Asked Questions
When could the new US tariffs on Canadian goods begin?
The threatened tariffs are scheduled to take effect at 12:01 a.m. ET on Saturday if the United States and Canada do not finalize an agreement.
What is Canada seeking on automobile tariffs?
According to sources cited by Reuters, Canada is seeking to reduce the US tariff on Canadian vehicles and parts to 10%, while the United States has offered a 15% rate.
Financial disclaimer: This article is intended for news and informational purposes only and does not constitute financial, investment, trading or tax advice.
Praveen Yadav is the Founder and Content Creator of The Nation Bulletin, an independent digital news platform focused on delivering timely, reliable and meaningful news from India and around the world.
