2026-08-18 · equities
Trump, Carney reportedly in talks ahead of new 50% tariffs on Canadian goods
President Donald Trump is in renewed trade talks with Canadian Prime Minister Mark Carney, with just hours to go before the U.S. imposes 50% tariffs on hockey sticks, wine and an array of other Canadian imports, according to various news reports Tuesday.
Trump and Carney spoke late Monday and are set to speak again Tuesday, Bloomberg reported. The talks between the leaders on Monday night did not convince Trump to hold off on the forthcoming retaliatory tariffs, Fox Business reported. The White House did not immediately respond to CNBC's request for comment.
The new tariffs are set to take effect Wednesday, unless a deal is struck to postpone or cancel them. Business leaders warn that the threat alone has generated significant uncertainty and already affected sales.
If no deal emerges, the import duties will become the latest that Trump, a megafan of using tariffs to protect domestic industries and raise government revenue, has slapped on Canada. The countries have long been close allies and top trading partners.
The 50% tariffs were unveiled last month in response to what the Trump administration called Canadian trade discrimination in the motor vehicle, alcohol and dairy industries.
They are being imposed under Section 338 of the Tariff Act of 1930, a Great Depression-era law that has rarely, if ever, been invoked and has been neglected for decades.
The new tariffs cover roughly $20 billion worth of Canadian imports, according to the Office of the U.S. Trade Representative.
While that's a fraction of the $382 billion that the U.S. imported from Canada last year, the high rate on targeted products could still pose major challenges to Canadian sellers.
"A 50% tariff essentially makes a product uneconomic to sell into a particular market," said Dan Kelly, president of the Canadian Federation of Independent Business, in an interview with CNBC.
Many of the group's 103,000 members said the new tariffs could "grind their U.S. sales to a halt" if implemented, Kelly said. Some businesses reported already seeing U.S. buyers hold off on future orders in anticipation of the new duties, he said.
Trump has already imposed a variety of tariffs on Canada and its specific exports, including metals, lumber and auto parts. Trump also imposed hefty tariffs on Canada over alleged drug-trafficking concerns, but the Supreme Court struck those down in February.
But the Section 338 tariffs "really strike at the heart of small business trade between Canada and the United States," because so many of the targeted products are consumer-oriented, said Kelly.
"It's deeply worrisome for a huge swath of Canadian businesses," he said.
Some of the Trump administration's tariffs on Canada include exemptions for goods compliant with the trilateral North American trade deal known as USMCA.
Last month, the Trump administration said it would not renew that trade agreement, triggering a series of annual reviews that raise questions about the treaty's future.
Neil Herrington, the U.S. Chamber of Commerce's senior vice president for the Americas, said in a statement Tuesday morning that new higher tariffs "would damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on trade" under the USMCA.