Canada and U.S. race to avert $29 billion tariff hit as deadline looms

Midnight Wednesday marks the deadline for a new U.S. tariff regime that would affect $29 billion of Canadian exports unless a bilateral agreement is reached. Prime Minister Justin Trudeau’s finance minister, Dominic LeBlanc, and chief trade negotiator Janice Charette have been in Washington meeting with United States Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick. President Donald Trump has signaled a possible 50% surcharge on a broad range of Canadian products, citing Section 338 of the Smoot-Hawley Tariff Act.

Canada is also pressing for reductions in Section 232 tariffs on automobiles, lumber, steel and aluminum, and hopes to restore U.S. alcohol sales and improve dairy market access. The U.S. Chamber of Commerce warned that the tariffs would raise costs for American families and disrupt supply chains, while the Canadian Labour Congress called for a deal that protects jobs and offers a contingency plan for workers if tariffs are imposed. The Canadian government is reportedly preparing a relief package for affected businesses and has not ruled out retaliatory measures.