The United States is considering reducing tariffs on Canadian steel, aluminum, and automobiles as part of a bilateral trade agreement still under negotiation, according to The Wall Street Journal . Negotiators are examining reductions that would bring steel and aluminum tariffs down from 50% to 25% and trim the headline auto tariff from 25% to 15%, though sources familiar with the talks warned the specifics have not been locked in and the final package may look different by the time anything is made public.
Any such reductions would fall under the broader trade framework Trump unveiled Tuesday evening, an announcement that came with barely two hours to spare before a distinct round of duties on Canadian imports was due to kick in. Trump paused those duties for three days while negotiations continue; they are now scheduled to take effect at 12:01 a.m. ET on Saturday, August 22.
Canada and the United States moved closer Wednesday to finalizing an agreement, with a senior Canadian official describing the emerging terms as "a very good deal for Canada" but noting that talks had not yet concluded, according to ABC News. Trump called the agreement "very fair" to both sides. The official requested anonymity, explaining that they lacked authorization to discuss the talks publicly ahead of any finalized agreement.
Several significant issues remain unresolved. Trump asserted that Canada had committed to scrapping tariffs on American farm goods, but Trade Minister Dominic LeBlanc, speaking to reporters in Washington, said the agriculture sector "will be well protected," and the senior Canadian official stated flatly that the dairy supply management system was "not on the table." It remains unclear how those two positions can be reconciled — Canada shielding its supply management regime while simultaneously delivering the expanded U.S. farm access Trump claims is part of the deal.
Nova Scotia Premier Tim Houston said, according to ABC News, that Prime Minister Mark Carney had urged provincial premiers to put U.S. alcohol back on store shelves. Across Canada, eight of the country's ten provinces have either curtailed or prohibited sales of American alcohol, actions that provincial governments took in retaliation for earlier rounds of Trump tariffs. The White House says the emerging deal includes a Canadian commitment to address those restrictions, though Carney cannot order provinces to restore sales.
Auto tariffs had been a persistent obstacle in negotiations , with the two sides divided over how to measure vehicle content for tariff purposes — specifically whether North American-made components beyond U.S. borders would count toward preferential rates. The tariffs were imposed under Section 338 of the Tariff Act of 1930, which Trump invoked last month, targeting Canada's auto, alcohol, and dairy sectors.
