Canada and the US are closing in on a trade deal after over three hours of talks in Washington, Canadian Trade Minister Dominic LeBlanc says. The proposed agreement would halve US tariffs on Canadian steel and aluminum and lower auto duties, down from a threatened 50% tariff, while the Canadian dollar has already climbed to a near three-month high.
Canada and the United States are closing in on a trade agreement after marathon negotiations in Washington. According to Crypto Briefing, Canadian Trade Minister Dominic LeBlanc described the two countries as "very close". The negotiations lasted over three hours with US Trade Representative Jamieson Greer, aiming to defuse a tariff standoff that has rattled North American commerce for months.
The proposed deal would reportedly halve US tariffs on Canadian steel and aluminum while also lowering duties on automobiles. That marks a climb-down from the 50% tariff on Canadian goods that Washington had been threatening, a levy that would have hit an estimated $20-30 billion worth of exports.
A three-day ceasefire
President Donald Trump added to the optimism by announcing a three-day pause on tariffs that had originally been scheduled to take effect on August 19-20. He cited the potential for a deal and referenced the revival of the Keystone XL pipeline as part of the broader bilateral agenda. Prime Minister Mark Carney has also acknowledged what both sides are calling substantial progress. Still, LeBlanc was careful to note that more work remains before the deal is done.
Whiskey diplomacy and provincial politics
Canadian provinces have used alcohol as a bargaining chip. All provinces except Alberta and Saskatchewan agreed to return US liquor products to their store shelves, a goodwill gesture meant to show Canada is willing to lower the temperature. The liquor ban had been a retaliatory measure during the tariff escalation, and provincial leaders who agreed to restock the products framed it as pragmatism, while those who refused urged residents to buy domestic alternatives instead.
Markets price in a deal
The Canadian dollar has responded to the negotiations by climbing to its highest level in nearly three months. The currency's strength reflects a combination of trade optimism and rising oil prices, both of which benefit the Canadian economy directly.
Steel and aluminum producers would see the most immediate relief from any deal, after operating under a cloud of potential 50% duties. A deal that locks in lower rates would let these industries make capital expenditure decisions with more confidence. The automotive sector is equally consequential, since cars and parts cross the US-Canada border multiple times during manufacturing, and lower duties would benefit manufacturers on both sides.
But if the deal falls apart, a full 50% tariff on $20-30 billion worth of Canadian goods would become one of the largest trade barriers between the two countries in modern history. Trump's three-day pause creates a narrow window: if negotiations stall, the duties snap back into effect.
Source: Crypto Briefing
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