US, Canada trade negotiators meet after Trump sets new tariff deadline

Sources said that auto tariff levels remained an issue. On Wednesday, Canadian and U.S. negotiators sat down to discuss trade after Donald Trump temporarily halted the planned 50% tariffs for three days on certain Canadian goods.

LeBlanc’s office released a press release stating that the Canadian Minister responsible for U.S. trade, Dominic LeBlanc and Canada's Chief Trade Negotiator Janice Charette had met U.S. Representative Jamieson Greer. Trump announced late Tuesday that the two countries have a deal, subject to finalizing documents. Canadian Prime Minister Mark Carney, however, was more circumspect. He said substantial progress had already been made, while "important work" still remained.

Negotiators now have a deadline of 12:01 am ET (0401 GMT) on Saturday. If there is no deal, tariffs will be imposed on $20 billion worth of Canadian goods. If there is no agreement, tariffs will be imposed on $20 billion of Canadian goods on Saturday at 0401 GMT. They would be applied regardless of whether or not the goods qualified for preferential treatment as part of the U.S. Mexico Canada trade agreement.

Talks on Cutting U.S. Auto Tariff

Automakers are expecting a final agreement that will drastically reduce the 25% U.S. duty on imported Canadian vehicles and parts. Two executives in the auto industry said that Canada wants to lower the tariff from 15% to 10% instead of what the U.S. is offering. U.S. tariffs on goods from Japan, South Korea, and the European Union are 15%, while UK products are 10%. There is no certainty that auto tariffs, as well as other auto-related issues like rules of origin and USMCA will be resolved in the coming week.

It is still unclear whether the U.S. allows the value of regional components -- such as those from Mexico, Canada or the U.S. -- to be deducted or if it will only allow the deduction of U.S. component values from imported vehicles. The second open question is if the reductions apply to passenger cars, trucks and medium and heavy duty vehicles. Sources say that Canada wants to reduce the rates for all vehicles.

In a White House announcement, senior U.S. official were told that Canada has committed to removing what Washington believes is discriminatory or unequal treatment for U.S. alcohol beverages, cheese, and motor vehicles.

The Canadian government hasn't confirmed these commitments, or revealed what concessions they have offered in return. Leger found that on Wednesday, 56% of Canadians wanted Carney to not make any more concessions to the U.S.

Candace Laing is the CEO of the Canadian Chamber of Commerce. She is a business organization. Charette's Office told the Prime Minster's Advisory Committee on Canada - U.S. Economic Relations on Monday night that, "given the sensitive nature of these discussions and their potential impact on Canada, we have no more details to share", two sources reported.

Greer said in a social media post on Tuesday night that the agreement would include a comprehensive market access to all American goods, commitments for economic security, alignment of digital trade, and other important provisions. However, she did not provide any further details.

The office of the President did not respond immediately to an email requesting further information.

KEYSTONE XL

In a Truth Social posting announcing a pause in the planned tariffs Trump said that the abandoned Keystone XL pipeline from Alberta to the U.S. could "be awoken" without explaining if it was a part of the agreement Canada and the U.S. discussed. Carney said in October that reviving this pipeline would help strengthen?U.S. Canada energy cooperation.

After years of opposition from environmentalists and Indigenous people, former President Joe Biden cancelled the pipeline in 2021.

South Bow, a TC Energy spinoff, which owns Keystone XL and is working on a new proposal for constructing a cross-border pipeline using some of this infrastructure, has declined to comment.

Trump implemented the measures in Section 338 of Tariff Act of 1929 as a response to Canadian policies affecting U.S. automobiles, alcohol and dairy products.

(source: Reuters)