WASHINGTON, D.C. (RFD NEWS) — New U.S. tariffs on Canadian goods are on hold for three days as the Trump administration and Canadian officials work toward a trade agreement.
The additional 50 percent tariffs were scheduled to take effect Wednesday, but President Donald Trump announced a delay late Tuesday, saying the two countries are close to finalizing a deal. The proposed duties would affect roughly $20 billion worth of Canadian goods.
The pause comes as U.S. and Canadian negotiators continue discussions over market access and other trade issues.
During a recent congressional hearing, lawmakers raised concerns that Canada could respond with additional tariffs. U.S. Trade Representative Jamieson Greer said he is not concerned about retaliation, pointing to what he says has been continued progress on market access for American farmers.
“We’re keeping the market access in Canada and Mexico,” Greer said. “The nature of all our trade deals over the past year has been expanding market access for our farmers.”
Greer has met with Canadian officials multiple times in recent weeks as the two sides work to resolve outstanding trade issues. Recent talks have focused on expanding U.S. access to Canadian markets, along with broader economic and digital trade provisions.
Canadian Prime Minister Mark Carney has confirmed substantial progress, but said important work remains before a final agreement is complete. Trump says the two countries are now finalizing the necessary documents, giving negotiators until the end of the three-day pause to complete the deal.
Shaun Haney, host of RealAg Radio, joined us on Wednesday’s Market Day Report to discuss the latest trade developments between the U.S. and Canada.
In his interview with RFD News, Haney said the delay is an encouraging sign that the deadline created additional urgency at the negotiating table.
Auto Sector a Key Sticking Point, but Ag Issues Still on the Table
Haney says several contentious issues remain, particularly steel, aluminum and automobiles.
The auto sector could be among the most difficult issues to resolve, especially because of its importance to states such as Michigan and Pennsylvania ahead of the U.S. midterm elections.
Haney says Canadian and Mexican officials are also coordinating with U.S. Trade Representative Jamieson Greer on auto-related issues, potentially allowing agreements with the two countries to move forward in parallel.
For agriculture, Haney says dairy trade remains an important issue. Negotiators are discussing Canada’s tariff-rate quota system and whether the country will move closer to the U.S. approach for administering those allocations.
Another issue involves Canada’s restrictions on U.S. alcohol.
Some Canadian provinces imposed bans on U.S. alcohol, wine and spirits following earlier trade tensions. Haney says lifting those restrictions is complicated because Canadian Prime Minister Mark Carney will need to work with provincial premiers to secure their support.
Is Three Days Enough? What Farmers Should Watch
Haney says he remains hopeful that negotiators can reach an agreement during the three-day window, but cautions that significant issues remain unresolved.
The tight timeline could produce a last-minute agreement, but Haney says negotiations could also extend into the weekend if the two sides cannot close the remaining gaps.
Haney recommends producers monitor currency and commodity markets, particularly movements in the Canadian dollar, as an indication of how traders are viewing the negotiations.
He also says producers should pay close attention to how Canadian officials, President Trump and U.S. trade officials characterize the talks.
While Carney has indicated there is still work to do, Trump and other U.S. officials have suggested a deal is close. Haney says whether those narratives begin to converge could signal the direction of negotiations.
