Canada, U.S. officials to meet again as 50% tariffs take effect in 3 days

Canada, U.S. officials to meet again as 50% tariffs take effect in 3 days

OTTAWA — Canadian and American negotiators are set to return to the table Sunday afternoon, with just three days remaining before a fresh wave of punishing U.S. tariffs is scheduled to land on Canadian goods.

The meeting between Dominic LeBlanc, the minister responsible for Canada-U.S. trade, and U.S. Trade Representative Jamieson Greer is scheduled for 4:30 p.m. Eastern, according to a spokesperson for LeBlanc. The call comes as the clock winds down toward Wednesday, Aug. 19, when the Trump administration has said it will impose a 50 per cent tariff on roughly $28 billion worth of Canadian goods.

Gabriel Brunet, LeBlanc's spokesperson, said in a statement that the conversation will be an opportunity "to take stock of the work that has been accomplished by their respective negotiating teams, and the work that still lies ahead, as we seek to reach a comprehensive deal that delivers for businesses, workers, farmers and families on both sides of the border."

The stakes could hardly be higher. Without a deal, Canadian industries from forestry to auto manufacturing face a new layer of economic pain on top of existing tariffs that have already disrupted supply chains and raised costs on both sides of the border.

Softwood lumber emerges as key sticking point

One of the most contentious files in the negotiations continues to be softwood lumber, where American duties currently sit at a staggering 45 per cent. Despite months of diplomatic effort, sources with knowledge of the talks tell Global News that the Americans have shown little appetite for reducing those tariffs as part of any comprehensive agreement.

Two sources, who were not authorized to speak publicly on the trade talks, said the gap on potential relief for the softwood lumber industry appears unlikely to close in the current round of negotiations. One source went further, telling Global News that Canada has had to fight simply to get softwood lumber onto the negotiating agenda at all.

The issue has become a political flashpoint in Ottawa. Conservative Leader Pierre Poilievre used a news conference Sunday to demand that Prime Minister Mark Carney secure the removal of softwood lumber tariffs as a non-negotiable condition of any deal.

"It is unacceptable for there to be U.S. tariffs on Canadian lumber," Poilievre said. "It's time for Mark Carney to keep his promise that he would negotiate a win and get the tariffs off Canadian softwood lumber. No more concessions while getting nothing in return."

Poilievre has also argued that Canadians deserve a "good deal" that includes zero tariffs on softwood lumber, an end to sectoral tariffs on steel and aluminum, a tariff-free auto pact and a full exemption to "Buy American" procurement rules.

Whether any of those objectives are achievable remains an open question. Based on information from sources, relief for the softwood lumber industry does not appear to be on the immediate horizon, a reality that will likely fuel further criticism from opposition parties and industry leaders in the forestry sector.

B.C. premier decries tariffs higher than those on Russia

The frustration is particularly acute in British Columbia, where the forestry industry has been hammered by decades of trade disputes and, more recently, by mill closures and job losses. Premier David Eby did not mince words on Friday when he addressed the current tariff rates.

"We face higher tariffs than Russia," Eby said. "The U.S., for some inexplicable reason, is putting forest families out of work here in order to prioritize lumber imports from Europe and Russia."

Eby's comments underscore a broader sense of bewilderment in Canadian political circles. The United States has imposed tariffs on Canadian goods that exceed those levied on countries with which Washington has far more fraught relationships, a fact that has not been lost on provincial premiers or federal officials.

The B.C. premier has been among the most vocal critics of the Trump administration's trade policy, and his remarks reflect the deep anxiety in communities that depend on forestry jobs. The softwood lumber dispute has dragged on for decades, with periodic truces and arbitration rulings failing to provide lasting certainty for Canadian producers.

For now, the 45 per cent duties remain in place, and sources suggest they are unlikely to be reduced in the current round of talks. That leaves the industry bracing for continued uncertainty even as other sectors may see some relief.

Auto sector fears being left out of the deal

Beyond lumber, the automotive sector is watching the negotiations with a mixture of hope and apprehension. Sources familiar with the talks say that if a deal is reached, tariffs on Canadian autos and parts compliant under the Canada-United States-Mexico Agreement (CUSMA) would remain in place, but at a reduced rate.

One proposal that has been discussed would see a tariff rate of between 10 and 15 per cent on CUSMA-compliant autos and parts, according to a source with knowledge of the discussions. That would represent a significant reduction from the current 25 per cent level, but it would still leave a substantial tax on the sector.

Auto industry leaders have been critical of the tariff regime, warning that sustained duties could force plant closures and job losses in Ontario, where the sector is concentrated. The stakes are particularly high in Brampton, home to a major assembly plant and a workforce that depends on cross-border supply chains.

Brampton Mayor Patrick Brown weighed in on Saturday, adopting a cautious tone about the prospect of a deal that does not adequately address the auto sector.

"No deal is better than a bad deal," Brown said, if the auto sector is not included in the talks.

Brown's comments reflect a broader concern among municipal and provincial leaders that the federal government may be willing to sacrifice certain sectors in order to secure a broader agreement. The auto industry is a cornerstone of Ontario's manufacturing economy, and any tariff regime that leaves the sector at a competitive disadvantage could have ripple effects far beyond the factory floor.

Alcohol, procurement and the shape of a potential deal

While the contours of a final agreement remain unclear, sources say the Trump administration is insisting on several specific concessions. Any deal the administration is willing to sign will include some form of tariffs on steel, aluminum, autos and lumber, according to sources, meaning that even a successful negotiation will not return trade relations to their pre-2025 status.

The Americans are also insisting that U.S. alcohol be put back onto all provincial liquor store shelves. Multiple premiers have expressed a willingness to do so, provided enough U.S. concessions are made in return. The alcohol issue has become a symbolic flashpoint in the trade dispute, with Canadian provinces having pulled American products from shelves in retaliation for earlier tariffs.

The "Buy American" procurement rules are another area of contention. Poilievre has called for a full exemption for Canadian businesses, but sources suggest the Americans are unlikely to grant broad relief on this front. The rules, which favour U.S. suppliers in government contracts, have been a long-standing irritant in Canada-U.S. trade relations.

As of Friday, a significant gap remained between the two sides, according to sources with direct knowledge of the negotiations. The Canadians are pushing for a comprehensive deal that would provide certainty across multiple sectors, while the Americans appear to be taking a more piecemeal approach, willing to offer limited relief in exchange for specific concessions.

Canada's goal remains reaching a deal before Wednesday to avoid the new 50 per cent tariffs on roughly $28 billion worth of Canadian goods from taking effect. That timeline is tight, and the negotiating teams have been working around the clock to bridge the remaining differences.

What happens if no deal is reached?

If the Wednesday deadline passes without an agreement, the 50 per cent tariffs will come into force on a wide range of Canadian goods. The impact would be felt across the economy, from forestry and agriculture to manufacturing and energy.

The tariffs would compound existing duties that have already raised costs for Canadian exporters and created uncertainty for businesses trying to plan for the future. Industry groups have warned that prolonged trade friction could lead to job losses, reduced investment and a permanent restructuring of supply chains that have been integrated for decades.

There is also a political dimension to the deadline. Prime Minister Mark Carney has staked considerable political capital on securing a deal that protects Canadian interests, and opposition parties are poised to pounce if the negotiations fall short of expectations. Poilievre's comments Sunday suggest the Conservatives are already positioning themselves to hold the government accountable for the outcome.

The meeting between LeBlanc and Greer on Sunday will be an important indicator of whether a deal is within reach. Both sides have described the talks as constructive in recent days, but the gap on key issues remains wide. The next 72 hours will determine whether Canada and the United States can find common ground or whether the two countries are headed for another escalation in their trade dispute.

For Canadian businesses, workers and families, the stakes could not be higher. The outcome of these negotiations will shape the economic relationship between the two countries for years to come, and the decisions made in the coming days will have consequences that extend far beyond the current dispute.

With files from Global News' Reggie Cecchini, Mackenzie Gray and Sergio Vargas.

Tags: Canada-U.S. trade, tariffs, Dominic LeBlanc, Jamieson Greer, softwood lumber, Pierre Poilievre, Mark Carney, auto sector, CUSMA, David Eby, Donald Trump, trade deal, B.C. forestry, Brampton, Patrick Brown

This article was produced with AI-assisted research and editorial support. Sources: Global News

By Alex Thompson, Staff Writer