U.S., Canada Near Final Trade Deal as Trump Tariff Deadline Looms

The United States and Canada are close to reaching a conclusive trade agreement, aiming to prevent the implementation of President Donald Trump's newly imposed tariffs on items such as hockey sticks and wine, which are scheduled to take effect early Saturday morning.

These retaliatory tariffs, set at 50%, were originally slated to begin on Wednesday. However, Trump announced a three-day postponement via Truth Social, allowing Washington and Ottawa additional time to finalize a preliminary accord.

Trump's announcement suggested the agreement was nearly complete, pending the finalization of documentation. Despite this, trade officials concluded additional talks in Washington on Wednesday and Thursday without a definitive agreement.

"We are very close," stated Canada-U.S. Trade Minister Dominic LeBlanc on Thursday afternoon. "We are continuing to make progress and will remain here to complete the necessary work until we achieve our objective."

LeBlanc confirmed that Canadian negotiator Janice Charette was still engaged in discussions with U.S. Trade Representative Jamieson Greer and other Trump administration officials.

"Canadians expect us to secure a deal that serves the economic interests of Canada and Canadian workers," LeBlanc added.

Should an agreement not be reached by 12:01 a.m. ET on Saturday, the 50% tariffs on approximately $20 billion worth of imports will be activated. Businesses have expressed concerns that these duties could severely impact their sales, and the mere threat has already had a detrimental effect.

Negotiators have been reticent about the specific details of the potential deal and the remaining points of contention. The New York Times reported on Thursday, citing sources familiar with the talks, that Trump's existing tariffs on Canadian steel, aluminum, and lumber remain a significant concern.

LeBlanc and his office have declined to comment to CNBC on how these metal tariffs are being addressed in the negotiations.

On Wednesday, Trump indicated that the U.S. might consider reducing these duties and suggested that lower tariffs on Canadian automobiles could also be a possibility. Additionally, Trump has floated the idea that the deal could potentially revive the Keystone XL oil pipeline project from Alberta to Nebraska, which was canceled in 2021 by then-President Joe Biden.

The Trump administration has stated that Canada has agreed to reduce its trade barriers for the U.S., though specific details have not been provided. Trump mentioned on Wednesday that Canadian tariffs "will be nonexistent for our farmers." The impending 50% tariff threat was partly a response to Canada's alleged discrimination against the U.S. dairy industry, a claim that Canada has not confirmed.

Prime Minister Mark Carney posted on X on Wednesday, stating, "We are now moving towards an agreement that reinforces that Canadian advantage, including by securing the best terms in each of Canada's most important strategic sectors and providing greater certainty about our future trading relationship."

The 50% tariffs were imposed last month under Section 338 of the Tariff Act of 1930, granting the president the authority to implement duties in retaliation for discrimination or unfair commerce. However, this law, dating back to the Great Depression, has been rarely used and largely neglected for decades.

This is a developing story. Please check back for updates.