Canada and the US Are Racing to Strike a Trade Deal Before August 19
Canada and the United States are in intensive, near-daily negotiations over a trade deal that would head off a new round of steep tariffs set to take effect August 19. According to reporting from The Globe and Mail, the two sides have exchanged detailed written proposals but have not reached an agreement, with talks continuing daily ahead of the deadline.
What's at Stake
Last month, President Trump announced 50% tariffs on a wide range of Canadian imports, set to take effect August 19 unless Ottawa addresses a list of US grievances. The US Trade Representative's office said the tariffs would apply to nearly $20 billion worth of Canadian imports. For context, the US imported about $382 billion in goods from Canada in 2025 total, so the threatened tariffs would hit a meaningful but contained slice of overall trade.
Prime Minister Mark Carney has said he wants a comprehensive deal rather than a partial fix, though sources familiar with the talks describe what's currently on the table as only a first-phase interim deal, with additional negotiations expected to continue through the fall regardless of what happens by the deadline.
What Canada Would Give Up
The proposed concessions cover several long-standing US trade complaints. Canada would remove its retaliatory tariffs on US autos, agree to the US interpretation of how dairy quotas should be allocated, lift provincial restrictions that keep American alcohol off store shelves, and remove provincial procurement restrictions that have limited US companies from bidding on Canadian government contracts.
Some of these concessions aren't entirely in the federal government's hands. Alcohol sales restrictions, for instance, are set at the provincial level, meaning even if Ottawa agrees in principle, individual provinces would need to act to actually restock American alcohol on their shelves.
What Canada Would Get in Return
In exchange, Canada is pushing for relief on Section 232 sectoral tariffs, the separate set of levies the US has maintained on steel and aluminum regardless of CUSMA compliance. The US is not expected to eliminate these tariffs entirely. Instead, negotiators have discussed tariff-rate quotas: a set volume of Canadian steel and aluminum that would enter the US at a lower rate, with anything above that quota facing steeper tariffs.
One source described the specific numbers under discussion: steel could face a 10 to 15% tariff inside the quota, with aluminum facing a single-digit rate inside its own quota. Canada is also seeking broader relief covering forest products and automotive supply chains, and wants the deal to head off a separate, newer set of Section 338 tariffs the US is planning to impose alongside the August 19 deadline.
Where Things Stand Right Now
Canadian officials, including Trade Minister Dominic LeBlanc, held what LeBlanc's office described as a “constructive and detailed meeting” with US Trade Representative Jamieson Greer this past week. The two sides are set to meet daily through the deadline.
Neither government has confirmed the details publicly. The White House and the Prime Minister's Office did not respond to requests for comment on the reporting, and Reuters said it could not independently verify the specifics of the proposed swap.
Canada has also prepared a fallback if talks collapse. One source told the Globe that if negotiations fail to prevent the new tariffs, Canada is ready to deploy “surgically targeted” retaliatory tools, not counter-tariffs, but measures aimed at limiting US access to Canadian procurement projects, critical minerals, and energy exports.
The Bigger Picture
This negotiation is the latest chapter in a trade relationship that has swung between escalation and de-escalation for more than a year. Canada dropped most of its counter-tariffs on US goods back in September 2025, in recognition of the US allowing most CUSMA-compliant Canadian goods to enter tariff-free. But Canada's counter-tariffs on steel, aluminum, and automobiles have remained in place specifically because the US has continued applying tariffs to those sectors without a CUSMA exemption.
It's part of a pattern that's kept 2026 a genuinely volatile year for anyone tracking US trade policy. Separate from the Canada talks, the end of the de minimis exemption reshaped sourcing decisions across the ecommerce industry, and the fallout from that shift is still working through refund claims and legal disputes months later.
Whether the Canada talks produce a deal by August 19 or simply buy more time before the next deadline, the pattern so far suggests this relationship is being managed one sector-specific negotiation at a time rather than resolved through a single comprehensive agreement.
