Archive · 20 Aug 2026
US and Canada Near Deal to Cut Metals, Auto Tariffs
The United States and Canada are trying to make a trade deal.
Trade tariffs are extra charges placed on goods coming from another country.
The proposed deal could cut some US tariffs on Canadian steel and aluminum from 50% to 25%.
It could also reduce tariffs on some Canadian car parts and content from 25% to 15%.
These lower rates might not apply to every product.
The United States paused broader tariffs on Canadian goods for three days while negotiators worked.
Canada may need to allow more US wine and spirits to be sold in the country.
Some US manufacturers want high tariffs to protect American jobs, while others worry tariffs raise costs.
The agreement is not final and could still change before the deadline.
The tentative deal could lower US tariffs on certain Canadian steel and aluminum exports from 50% to 25%.
Duties on the non-US content of Canadian automobile exports could fall from 25% to 15%.
The proposed reductions may exclude some derivative metal products and remain subject to further negotiations.
President Donald Trump paused planned 50% tariffs on billions of dollars of Canadian goods for three days.
Canada may need to remove restrictions on US alcohol and other exports, while final terms remain unannounced.
- Who
- US President Donald Trump, Canadian Prime Minister Mark Carney, and trade negotiators from the United States and Canada.
- What
- The countries are negotiating a tentative trade agreement that could reduce tariffs on certain Canadian metals and automobile exports while requiring Canadian market-access concessions.
- When
- Negotiations continued Wednesday during a three-day pause in planned tariffs, with a Friday deadline cited for finalizing the arrangement.
- Where
- The agreement concerns trade between the United States and Canada, including their integrated North American supply chains.
- Why
- The governments are seeking to avoid broader tariffs, reduce pressure on key industries, and address US complaints about Canadian barriers to American exports.
Tariff Relief Advocates
Tariff Protection Advocates
Lowering metals tariffs
Tariff Relief Advocates
Canadian negotiators and supporters of the deal favor lower rates to ease pressure on Canadian industries and reduce costs for US buyers that rely on Canadian aluminum.
Tariff Protection Advocates
The Coalition for a Prosperous America and other US manufacturing stakeholders want high tariffs retained on derivative aluminum and other metal products to protect domestic fabrication.
Effect on US jobs and prices
Tariff Relief Advocates
Reducing tariffs could lower costs for US importers and consumers because Canadian aluminum tariff costs have largely been passed on to American buyers.
Tariff Protection Advocates
Industry advocates warn that lower protection could put about 125,000 US jobs in aluminum rolling, drawing, and extruding at risk.
Whether the deal is worthwhile
Tariff Relief Advocates
The agreement could prevent broader tariffs and give Canada preferential rates compared with some other countries.
Tariff Protection Advocates
Canadian critics may object that the proposed rates remain above historical norms, while Carney has previously described the tariffs as illegal.
- Steel and aluminum tariffs
- Certain Canadian steel and aluminum exports could face a 25% US tariff, down from 50%.
- Automobile tariffs
- Tariffs on the non-US content of Canadian auto exports could fall to 15% from 25%.
- Agreement status
- The deal remained tentative and was still being finalized; the White House cautioned that reported details were speculative until officially announced.
- Tariff pause
- Trump paused planned 50% tariffs on billions of dollars of Canadian goods for three days.
- Potential Canadian concessions
- Canada may remove restrictions affecting US wine, spirits, dairy, and motor-vehicle exports; the alcohol-related measures were particularly central to the talks.
- Trade relationship
- The United States and Canada conducted roughly $880 billion to $900 billion in goods and services trade last year, according to the sources.
- Aluminum dependence
- Canadian supplies account for about half of US aluminum consumption.
