Trump Weighs Canada Tariff Reprieve Ahead of Midnight Deadline

The proposed agreement is being described as an “early harvest” or interim deal that could unlock broader negotiations over the USMCA, the North American trade agreement scheduled for review this year.

Political stakes are high on both sides. Canadian Prime Minister Carney faces domestic pressure against making concessions, given widespread frustration with Trump’s trade policies and his repeated comments about Canada becoming the 51st US state. Trump also faces political risks if the tariffs go ahead. Higher trade costs would create economic strain ahead of the US midterm elections, particularly in Michigan and Maine, where Canada-US trade is economically important.

Steel and aluminum remain unresolved. Canada is seeking relief from US tariffs, but the Trump administration has shown little willingness to compromise on the 50% steel tariffs. US Trade Representative Greer has argued that the measures are benefiting domestic steel production, people familiar with the discussions said.

The Canadian dollar jumped after the Politico report. Traders said further gains could materialize if a deal is announced before the deadline. Trump and Carney met during the Canada-U.S. summit in Ottawa on August 18, and negotiators from both sides had originally hoped for a deal by August 21.