WASHINGTON – With the clock ticking towards a looming midnight deadline, President Trump and Canadian Prime Minister Mark Carney engaged in a flurry of phone conversations on Tuesday, striving to reach a crucial trade agreement. Despite these last-minute efforts, the White House remains cautious about the possibility of finalizing a deal.
On the line are 50% tariffs set to be imposed on $20 billion worth of Canadian goods, including popular exports such as hockey sticks, wine, and cheese.
By Tuesday afternoon, administration officials admitted that no resolution was visible on the horizon. This leaves retaliatory tariffs poised to take effect just past midnight, precisely at 12:01 am.
Addressing the press on Monday, Prime Minister Carney characterized the ongoing discussions as “very delicate and intense.” He made it clear that Canada was ready to respond if an agreement could not be achieved.
A breakthrough, if it occurs, would be announced directly by President Trump, according to a U.S. official. Until then, they dismiss all other reports as mere “baseless speculation.”
Trump and Carney spoke at least twice in the past 24 hours: once on Monday and again on Tuesday. Canadian Trade Minister Dominic LeBlanc and Chief Trade Negotiator Janice Charette have been in Washington DC for several days for in-person meetings with USTR Jamieson Greer and Commerce Secretary Howard Lutnick.
The White House described the tariffs as payback for Canada’s own taxes on US goods, particularly on American autos, alcohol and dairy.
These tariffs are separate from the retaliatory action President Trump has threatened against Ottawa for the wildfire smoke that drifted across the border and clogged up American skies. He’s accused America’s neighbor to the north of poisoning US air with it smoke.
The president told The Post earlier this month he’s decided on a punishment for Canada but was not ready to announce it.
Canada is the third largest source of imports for America. The products affected by the new tariffs would include consumer goods, but also building materials such as cement and plywood.
Energy products, potash, fish and critical minerals are excluded from the tariff list.
The US goods trade deficit with Canada was $46.4 billion in 2025, according to the Office of the US Trade Representative.
Trump has long seen Canada as a bete noir and publicly mused about making it America’s 51st state. He had an antagonistic relationship with former Prime Minister Justin Trudeau.
He and Carney have a cordial but tense relationship. The two leaders last saw each other in July at the World Cup final in New Jersey, where Trump failed to mention the retaliatory tariff threat he would announce the next day.
However, the two nations have been involved in a year-long trade tit-for-tat.
Trump has hit Canada with a variety of tariffs and Ottawa has responded with tariffs of its own in a repeated back-and-forth trade scuffle.
Currently, US tariffs on Canadian goods include a 25% tariff on steel and aluminum, a 35% tariff on softwood lumber, a 10% tariff on certain energy products, a 12.5% tariff related to forced labor prohibitions, and a 25% tariff on cars not built in the US.
In response to those tariffs, Canada imposed a 25% tariff on fully assembled motor vehicles imported from the United States and on alcohol products. On dairy, Canada only imposes a tariff when American imports pass a certain threshold.