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WASHINGTON -- Canada and the United States moved closer Wednesday to finalizing a trade agreement that would avert threatened 50% U.S. tariffs, with a senior Canadian official calling the emerging terms "a very good deal for Canada" while cautioning that negotiations were not complete.
President Donald Trump said the agreement was "very fair" to both sides and predicted U.S. farmers and manufacturers would benefit. The tariffs on about $20 billion worth of Canadian imports have been postponed until 12:01 a.m. Saturday.
The senior Canadian official said the emerging agreement would provide greater certainty, protect Canada's dairy sector and jobs threatened by the new tariffs, and preserve what Ottawa considers favorable trade terms with the United States.
Prime Minister Mark Carney has asked provincial premiers to return U.S. alcohol to store shelves, Nova Scotia Premier Tim Houston said, a step aimed at addressing one of the Trump administration's key trade complaints. Houston and Saskatchewan Premier Scott Moe, both conservatives, voiced support for the direction of the talks, though Houston said whether Canadians would actually buy U.S. alcohol again "is a whole other discussion."
The senior official spoke on condition of anonymity because they were not authorized to discuss the negotiations publicly before an agreement is finalized.
Dominic LeBlanc, the minister responsible for Canada-U.S. trade, returned to Ottawa on Wednesday to meet Canadian Prime Minister Mark Carney, who chaired a Cabinet meeting and a virtual meeting with provincial and territorial leaders.
Trump's tariffs would hit 5% of Canadian exports
Last month, Trump invoked a never-before-used legal authority, dating back to the Great Depression, to announce that the United States would slap 50% tariffs on $20 billion, or about 5%, of Canadian exports to the United States, ranging from hockey sticks to tongue depressors.
Trump claimed that Canada discriminates against American exports of autos, alcohol and cheese. The U.S. president is also furious that Canada and China were the only countries that punched back with retaliatory tariffs of their own when he slapped levies on their products.
The United States and Canada have sparred for decades over trade, poking each other over sore spots like Canadian softwood lumber imports and U.S. access to Canada's protected dairy market.
Canada's dairy market has been a persistent irritant
While details of the agreement emerging Wednesday remain vague, Trump claimed Canada had agreed to end tariffs on U.S. agricultural products. "The tariffs will be non-existent for our farmers. Our farmers were paying tremendous tariffs into Canada, and those tariffs are going to be totally eviscerated. Down to zero," he said.
Canada currently allows a set amount of dairy imports at low tariffs. Once imports exceed that limit, much higher tariffs apply. The U.S. says Canada's "supply management" system makes it harder for American dairy producers to get full access to the Canadian market.
LeBlanc, talking to reporters in Washington, said Canada's "agriculture sector will be well protected and we have maintained our tough line.''
The senior Canadian official was even more explicit, saying supply management was "not on the table" and Canada's dairy system would remain protected.