US, Canada Race Midnight Deadline to Avert 50% Tariffs

KEMETIC MINDS — BREAKING NEWS
August 18, 2026

WASHINGTON — The United States and Canada are holding last-minute negotiations to reach a truce before President Donald Trump’s 12:01 a.m. Wednesday deadline to impose 50% tariffs on $20 billion worth of Canadian products, according to a report from the San Diego Union-Tribune (Wiseman & Gillies, 2026).

Key Facts

• If no deal is reached, Trump has threatened to impose 50% tariffs on $20 billion worth of Canadian products, ranging from hockey sticks to tongue depressors (Wiseman & Gillies, 2026).
• Canadian Prime Minister Mark Carney told reporters Monday, speaking in French, that the negotiations are “very intense and delicate” and that “this is not the time to talk about negotiations in public” (Wiseman & Gillies, 2026).
• Carney and Trump spoke by phone Monday afternoon about the ongoing trade negotiations, Carney’s office said (Wiseman & Gillies, 2026).
• Trump invoked Section 338 of the Tariff Act of 1930 to impose the tariffs, a provision never before used, claiming Canada discriminates against U.S. exports of autos, alcohol and cheese (AP, 2026).
• Nearly 72% of Canada’s goods exports last year went to the United States (Wiseman & Gillies, 2026).

Negotiations and the Canada-U.S. Relationship

The two countries have wrangled for decades over trade, including Canadian softwood lumber imports and U.S. access to Canada’s protected dairy market, while remaining friends, allies and trading partners (Wiseman & Gillies, 2026). Canadian soldiers fought alongside Americans in Afghanistan after 9/11; the 5,525-mile U.S.-Canada border is undefended; nearly 330,000 people and $2 billion worth of goods cross it every day; and 800,000 Canadians live in the United States (Wiseman & Gillies, 2026).

Trump’s approach to dealing with Canada marks an extraordinary departure from the traditionally cooperative relationship between the two countries, the AP report states; he has hit Canadian goods with tariffs in a push to bring manufacturing back to the United States and has repeatedly made inflammatory comments about turning Canada into America’s 51st state (Wiseman & Gillies, 2026). A petition to expel U.S. Ambassador Pete Hoekstra, a Trump ally, has collected nearly 218,000 signatures since July 21 and accuses him of having “normalized” Trump’s talk of annexing Canada (Wiseman & Gillies, 2026).

Economic Stakes and What Washington Wants

Section 338 of the Tariff Act of 1930, which Trump invoked against Canada, allows import taxes on products from countries that have discriminated against U.S. businesses; the provision has never before been used, according to ClickOrlando’s report (AP, 2026). The so-called Smoot-Hawley tariffs are notorious among economists and historians for limiting world commerce and making the Great Depression worse (AP, 2026). The AP report also notes that, after the Supreme Court ruled the president overstepped his authority by imposing double-digit import taxes on almost every country on earth as a national emergency, Trump last month imposed new import taxes of 10% to 12.5% on 59 countries and the European Union, accusing them of allowing forced labor (AP, 2026).

The Trump administration might be wary of imposing a hefty new tariff — paid by U.S. importers who try to pass along the cost to consumers via higher prices — ahead of November’s midterm elections, with American voters already frustrated by the high cost of living (Wiseman & Gillies, 2026). Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, said, “I don’t think either side really wants these tariffs to come into effect,” adding, “There’s a pretty strong push on both sides to find an off ramp here” (Wiseman & Gillies, 2026). Majerus said the United States is aiming to get Canada to buy more U.S. military equipment, including F-35 fighters; to take part in Trump’s “Golden Dome” missile defense; and to give the United States more access to critical minerals (Wiseman & Gillies, 2026).

What’s Still Unconfirmed

Whether the two sides will reach a deal before the 12:01 a.m. Wednesday deadline remains unconfirmed. Carney declined to discuss the negotiations in public, and the specific terms under discussion have not been disclosed (Wiseman & Gillies, 2026).

References

1. clickorlando.com. (2026, August 18). The Latest: Last-minute talks seek to stop US tariffs on Canadian goods. clickorlando.com
2. San Diego Union-Tribune. (2026, August 18). US and Canada hold last-minute talks to stop Trump’s 50% tariffs. sandiegouniontribune.com