Trump and Carney Reach Preliminary Trade Deal to Avert Tariffs

President Donald Trump and Prime Minister Mark Carney reached a preliminary trade agreement on August 19, 2026, to avert threatened 50% tariffs on approximately $20 billion to $28 billion of Canadian imports. Trump implemented a three-day pause on the levies, extending the deadline to midnight Saturday to allow officials to finalize documentation in Washington.

The proposed deal would reduce tariffs on Canadian-built vehicles from 25% to 15% and lower duties on Canadian steel and aluminum to 25%. In exchange, Canada committed to removing discriminatory treatment of U.S. cheese and motor vehicles. Trump also suggested the canceled Keystone XL pipeline might be revived, though this remains unconfirmed as a formal term.

As a sign of good faith, Carney requested that provincial premiers lift retaliatory bans on U.S. alcohol sales implemented in 2025. While leaders in Nova Scotia and Newfoundland and Labrador expressed support, others remained cautious. Quebec Premier Christine Fréchette demanded more information on dairy and forestry protections, while Manitoba Premier Wab Kinew criticized Trump as erratic and irresponsible, even as he reluctantly opened the door to restoring alcohol sales.

U.S. Trade Representative Jamieson Greer noted the deal includes economic security commitments and digital trade alignment, the latter of which sparked concerns regarding Canada's digital sovereignty. Meanwhile, the U.S. continues to press for direct retail access for U.S. cheese exporters, a move opposed by Canadian dairy industry representatives who cite risks to national food sovereignty.