The United States (US) and Canada are negotiating to reach a last-minute deal to avoid new US tariffs of 50 percent going into effect at midnight tonight.
Tensions between the two neighboring countries could escalate if an agreement is not reached by midnight tonight and US President Donald Trump does indeed impose 50 percent tariffs on Canadian products, worth a total of about $20 billion.
As the deadline approaches, the two countries are seeking some kind of truce to avoid new tariffs from going into effect.
"We are negotiating. The negotiations are very intense and sensitive. Now is not the time to talk about it publicly," Canadian Prime Minister Mark Carney told reporters on Monday.
Almost 72 percent of Canada's exports last year went to the United States.
The Trump administration would have to be cautious about imposing a large new tariff – which would be paid by US importers and then passed on to consumers through higher prices – because there are congressional elections in November, halfway through the US president's term.
American voters are already frustrated with the high cost of living.
Canadians would like relief from U.S. tariffs on steel and aluminum, as well as softwood lumber, which America claims receives unfair government subsidies.
Trump has made tariffs a central part of his economic agenda for his second term. Last year, he imposed double-digit tariffs on imports from nearly every country in the world.
The Supreme Court ruled in February that Trump had exceeded his authority, but the US president immediately sought other ways to renew his plan for new tariff measures.
In July, Trump imposed tariffs of 10 to 12,5 percent on 59 countries and the European Union – which together account for 99 percent of US imports – for allegedly lacking or failing to enforce restrictions on imports of goods made using (cheap) forced labor.
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