As the clock ticks toward midnight, Canada and the United States remain without a trade deal capable of stopping 50% tariffs from hitting nearly $28 billion worth of annual Canadian exports.Unless a last-minute agreement is reached, the tariffs will take effect at 12:01 a.m. Eastern time Wednesday, striking Canadian food producers, distillers, manufacturers and consumer-goods exporters while adding to existing pressure on the auto sector. A White House official said a Monday conversation between the two leaders failed to resolve the dispute.Edward Lawrence, a White House correspondent for Fox News, reported Tuesday that the official confirmed U.S. President Donald Trump spoke with Prime Minister Mark Carney Monday night about the retaliatory tariffs.“There was no resolution that would prompt the President to hold off on the retaliation tariffs,” Lawrence reported the official as saying.No breakthrough had been announced by either government as of Tuesday afternoon.Carney and Trump spoke as negotiators made a final push to resolve the dispute.“We are negotiating,” Carney told reporters Monday. “The negotiations are very intense and delicate. This is not the time to talk about negotiations in public.”.Trump signed three proclamations in July imposing the tariffs under Section 338 of the U.S. Tariff Act of 1930, accusing Canada of discriminating against American automobiles, alcoholic beverages and dairy products.The White House orders apply the additional duties even to covered products that previously received preferential treatment under the Canada-United States-Mexico Agreement.Washington has objected to Canada’s supply-management system, provincial restrictions on the sale of American alcohol and measures affecting imports of U.S.-made vehicles.The new duties extend well beyond the three sectors cited by Trump.Hundreds of product categories are covered, including dairy ingredients, honey, wine, spirits, cement, wood and paper products, plastics, packaging, clothing, furniture, industrial machinery, electronic equipment and cosmetics.Sporting-goods manufacturers will also face the tariff, with Canadian hockey sticks, skates and other equipment included in the affected categories.Alcohol producers could be among the most immediately exposed. Canadian wineries, breweries and distillers selling into the American market would see their products become sharply more expensive for U.S. importers and consumers.Agricultural and food processors face similar pressure, particularly businesses producing dairy ingredients, prepared foods and specialty products for American customers.Manufacturers of building materials, furniture, plastics and packaging could also be hit hard because many operate within integrated North American supply chains and depend heavily on the U.S. market.Canada’s auto industry was already contending with separate U.S. tariffs before the latest dispute. Ontario assembly plants and parts suppliers remain particularly vulnerable to any prolonged trade conflict because components routinely cross the border several times during vehicle production.Steel, aluminum and softwood lumber producers are also operating under separate American trade restrictions, leaving several major Canadian export industries under pressure even if the latest tariffs are eventually withdrawn.Energy, potash, fish and critical minerals are excluded from the new 50% duties.An analysis cited by Desjardins estimated the tariffs would affect approximately $28 billion in annual Canadian exports. Although that represents a relatively small share of the overall economy, the damage could be concentrated among companies and communities dependent on particular products.Carney previously said Canada was prepared to take stronger action if no agreement was reached by August 19.“We are going to do everything that would be necessary if there isn’t a deal,” he said earlier this month.Ottawa has not publicly disclosed what retaliatory measures it is preparing, although Carney has said “everything is on the table.”Conservative Canada-U.S. relations critic Shuvaloy Majumdar said Monday that Canadians face “the real prospect of yet more unjustified and illegal tariffs” from Trump.Majumdar said premiers, business leaders, workers, unions and the Official Opposition were united behind Canada’s negotiators.“We have grown tired of seeing our country used as a punching bag,” he said. “Yet we share a common hope that Prime Minister Carney will deliver a genuine win at the negotiating table.”.He said Conservative support depended on reaching an agreement that removes the tariffs and duties affecting Canadian steel, aluminum, lumber and automobile producers.Majumdar said 2.6 million Canadians rely on trade with the United States, while claiming 15,000 forestry workers have been left unemployed since 2022. He also pointed to lost shifts and incomes among auto workers in Ingersoll, Oshawa, Brampton and Sainte-Thérèse and the threat of layoffs in the steel and aluminum industries.“A durable agreement that finally removes tariffs and restores certainty for our businesses will be more than good news,” Majumdar said. “It would bring a measure of relief to workers and their families who have lived with this anxiety for too long.”With only hours remaining before the deadline, Canadian exporters are left waiting to learn whether the negotiations will produce a reprieve or another escalation in the trade war.
