Canada and the United States are pointing to major progress in their latest trade negotiations after reaching a draft agreement that appears to have prevented a new round of steep tariffs on Canadian goods.
Canadian Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamieson Greer presented the agreement as a step toward strengthening economic ties and reducing tensions that have affected businesses on both sides of the border.
Greer said the agreement would help protect American workers while reinforcing North America’s position as a major manufacturing and energy hub. Prime Minister Mark Carney, meanwhile, said the deal would build on Canada’s existing trade advantages with the United States.
Tariff deadline temporarily pushed back
The discussions followed U.S. President Donald Trump’s decision to delay by three days a proposed 50% tariff on roughly $28 billion worth of Canadian goods.
The measures were due to take effect early Wednesday and would have covered a wide range of products, including hockey equipment, ice skates, honey and certain dairy products.
The latest tariffs would also have applied to goods covered by the Canada-U.S.-Mexico Agreement (CUSMA), unlike several earlier measures introduced by the Trump administration.
The new deadline is 12:01 a.m. ET Saturday if the final documents are not completed.
Steel and aluminum remain key issues
Although Ottawa has not released the full details of the draft agreement, several reports indicate that the United States could reduce its sectoral tariffs on Canadian steel and aluminum.
Bloomberg and The Wall Street Journal reported that the duties could fall from 50% to 25%, although Canadian officials have not confirmed the exact rate.
LeBlanc also confirmed that Canada’s supply-managed dairy system will remain in place.
The negotiations have focused on several issues identified by Washington as trade irritants, including Canada’s dairy system, tariff-free vehicle import quotas and provincial restrictions on American alcohol products.
Businesses seek certainty
The proposed agreement could provide some relief for Canadian companies that have faced months of uncertainty over tariff policy.
A source familiar with the negotiations said the agreement would protect approximately 56,000 jobs while providing businesses and investors with greater clarity over future tariff rates.
However, uncertainty remains over the durability of the arrangement. International trade lawyer William Pellerin warned that any agreement could potentially be reversed by the U.S. administration.
“We have to understand that any deal that we strike could get overturned and that we’re buying temporary relief,” he said.
Canadian business and labour representatives have also urged Ottawa to examine the final terms carefully before accepting the agreement.
With the revised tariff deadline approaching, Canadian and U.S. officials now face a short window to finalize the documents and prevent another escalation in the bilateral trade dispute.
