TLDR
- Trump has threatened 50% tariffs on $20 billion in Canadian goods, set to kick in at midnight Wednesday
- Canadian PM Mark Carney called talks “very intense and delicate” after Monday phone call with Trump
- Talks center on concessions including U.S. duties on Canadian metals, lumber, and auto parts
- The auto sector remains a key sticking point, with spirits access also a flash point
- Analysts expect a narrow delay rather than a full deal, with USMCA renewal also at risk
The U.S. and Canada are locked in last-minute negotiations to avoid a new round of tariffs set to hit at midnight. If no deal is reached, President Donald Trump will impose 50% tariffs on $20 billion worth of Canadian goods.
In less than 24 hours, the U.S. could hit Canada with a new round of punishing tariffs.
U.S. President Donald Trump has threatened 50 per cent tariffs on US$20 billion worth of Canadian goods, including cement and hockey sticks. Those levies will come into force just after… pic.twitter.com/WCLnygdmxz
— CTV News (@CTVNews) August 18, 2026
The list of targeted products ranges from hockey sticks to tongue depressors. The tariffs would be applied under Section 338 of the Tariff Act of 1930, which allows duties of up to 50%.
Canadian Prime Minister Mark Carney confirmed talks were ongoing but said little else. “The negotiations are very intense and delicate. This is not the time to talk about negotiations in public,” Carney told reporters Monday.
Carney and Trump spoke by phone Monday afternoon. Canada’s Trade Minister Dominic LeBlanc told reporters after a Washington meeting that “our job is not yet done.”
U.S. Trade Representative Jamieson Greer described the talks as constructive but said “there are a lot of issues.” He also took a swipe at Canada, saying its retaliatory tariffs were “the kind of things that China would do.”
What Both Sides Are Negotiating
The talks have focused on mutual concessions. The U.S. may reduce duties on Canadian metals, lumber, and auto components. In return, Canada could open up more access for U.S. dairy products and cut its retaliatory tariffs.
One specific flash point is Canadian restrictions on U.S. wines and spirits. There is some optimism that a deal could return U.S. spirits to Canadian shelves.
The auto sector remains unresolved. People familiar with the talks told Bloomberg that cars and auto parts are still a major sticking point.
Despite the tension, analysts believe a full deal is unlikely. Tobin Marcus of Wolfe Research wrote that he expects “a simpler punt of tariff threats,” with Trump preferring a narrow off-ramp over a bigger agreement.
The Bigger Picture for Trade
The new tariffs, if they go forward, apply to roughly 5% of Canadian goods the U.S. imported last year. The immediate economic hit may be limited, but the signal it sends matters more.
The U.S.-Mexico-Canada Trade Agreement was not renewed in July and is now in annual review mode. It expires completely on July 1, 2036, if no new deal is reached.
Capital Economics warned that a breakdown in talks risks “reigniting a tit-for-tat trade war,” slowing business confidence and growth. The Canadian Chamber of Commerce also warned it could damage both economies and threaten 13 million American jobs tied to USMCA trade.
Public opinion in Canada has hardened. A petition to expel the U.S. ambassador has collected nearly 218,000 signatures since July 21.
As of Monday evening, talks were still ongoing with no deal confirmed.
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