Trump team casts doubt on imminent Canada tariff deal ahead of midnight deadline

The Trump administration is playing down the chances of a last-minute deal with Canada to avert a fresh round of 50% tariffs set to kick in at midnight on August 19, according to people familiar with the matter. With the deadline looming, U.S. officials privately described the odds of an agreement by August 18 as a coin flip or worse, though it remains unclear whether this reflects genuine pessimism or a negotiating tactic to extract concessions. The two sides have been locked in tense negotiations, with President Donald Trump and Canadian Prime Minister Mark Carney scheduled to speak again on August 18 in a final push for a breakthrough. The White House, the Office of the U.S. Trade Representative, and Carney’s office did not immediately respond to requests for comment. The proposed tariffs would target billions of dollars’ worth of Canadian goods, with the auto sector’s treatment emerging as a major sticking point. The U.S. has reportedly presented what it calls its best offer to Canada, but even a call between Trump and Carney—a last-ditch effort—is seen as a long shot by U.S. officials. Should the tariffs take effect, they would further strain the already frayed relationship between the two nations, which has deteriorated since Trump’s return to office in 2025. His second term began with sweeping tariffs on Canada and Mexico, and he has openly questioned the value of the U.S.-Mexico-Canada Agreement (USMCA), the trade pact he championed during his first presidency. The threat of tariffs under Section 338 of the Tariff Act of 1930—an unprecedented move—reflects the administration’s attempt to pressure Canada amid a broader review of the continental trade deal. Canadian officials have warned that implementing these tariffs would provoke a strong public backlash and effectively end Prime Minister Carney’s ability to negotiate further concessions. The dispute has already fueled resentment in Canada, with provincial governments pulling American-made alcohol from shelves and many Canadians canceling or avoiding trips to the U.S. The auto sector remains a critical flashpoint in the talks, with Canada seeking deferral of the proposed Section 338 tariffs and relief from existing tariffs on sectors like autos and steel. Meanwhile, the U.S. is pushing Canada to end its alcohol boycotts and drop other retaliatory measures. The two countries have seen sharp reversals and eleventh-hour swings in their trade actions throughout Trump’s second term. In February 2025, Trump delayed plans to impose 25% tariffs on imports from Canada and Mexico, only to introduce a diluted version the following month. Canada responded with retaliatory tariffs, though many were later removed by Carney. The uncertainty surrounding the negotiations underscores the volatile nature of U.S.-Canada trade relations under Trump’s second term.