Canada and the United States said on 19 August 2026 that they were close to finalising a new trade agreement, with President Donald Trump and Prime Minister Mark Carney both describing the emerging deal as a win for their respective countries, even as many of its specific terms remained undisclosed.
Trump suggested the pact would benefit American farmers and manufacturers, while Carney said it would lock in favourable terms for Canada's most sensitive industries and give businesses greater certainty about the trading relationship going forward. The announcement followed a third straight day of talks between negotiators from both countries and came after Trump held off on a threatened round of new tariffs on Canadian goods that had been due to take effect overnight.
What did negotiators actually agree to?
US Trade Representative Jamieson Greer told reporters after a 45-minute session with his Canadian counterpart that Washington was satisfied with where the talks had landed, adding that he intended to update Congress and other US stakeholders on the details shortly.
"We feel confident that we've reached an agreement that will not only continue to protect American workers, American jobs, American supply chains, but really strengthen the North American economy," Greer said.
Greer said the agreement would clear away "some of the irritants" that had strained trade relations, and Trump indicated Canada had agreed to drop tariffs affecting American farmers, though he did not name which agricultural products would be covered. Asked whether Washington would reciprocate by lowering some of its own tariffs on Canadian goods, Trump said it would do so "a little bit."
According to , Trump described the paused 50% tariffs as contingent on the deal being "subject to the finalization of documents," and Canadian officials had not confirmed the substance of the arrangement. US officials characterised the emerging pact as offering "comprehensive market access for all American goods, economic security commitments, digital trade alignment," though they did not elaborate further, reported.
Trump's proclamation pausing the tariffs stated that Canada had committed to addressing US concerns over duties on dairy products, alcoholic beverages and motor vehicles, according to . Separately, reported that Canadian negotiators were pushing to bring the US tariff on imported vehicles and parts down to 10%, citing auto industry executives, while Canadian broadcaster CBC reported that an earlier US proposal under discussion involved cutting auto tariffs from 25% to 15%, with a further cut to 7.5% possible for Canadian-made vehicles containing more American content.
What is Canada trying to protect?
Carney said in a post on X that he had congratulated Greer along with Canada-US Trade Minister Dominic LeBlanc for the progress made in the negotiations.
"We are now moving towards an agreement that reinforces that Canadian advantage, including by securing the best terms in each of Canada's most important strategic sectors and providing greater certainty about our future trading relationship," Carney wrote on Wednesday.
Carney was scheduled to meet with his cabinet and provincial leaders on Wednesday afternoon to brief them on the state of the negotiations. LeBlanc and his team had spent more than a week in Washington working towards an agreement ahead of the 50% tariffs Trump had planned to impose on Wednesday, which have since been pushed back to the weekend.
Canada had entered the talks seeking reductions or removals of US tariffs on steel, aluminium, automobiles and lumber. In exchange, the United States pressed Canada to drop its remaining retaliatory tariffs on American-made vehicles, adjust its dairy quotas to give US cheese producers greater access, and lift the ban on US alcohol sales that most Canadian provinces imposed last year in response to Trump's tariffs.
Asked whether the deal would include major concessions on dairy, LeBlanc said Canada's supply management system, which governs production quotas, pricing and import limits for dairy, eggs and poultry, would remain intact.
Canada's dairy supply management programme will remain "entirely intact," LeBlanc said.
How have businesses and the public reacted?
Polling firm Leger found that 56% of Canadians surveyed wanted their government to take a hardline stance in the negotiations, suggesting limited public appetite for major concessions to Washington. Business groups on both sides of the border, however, have urged both governments to reach an agreement, warning that further tariffs between the two economies would cause lasting damage.
Dennis Darby, president of Canadian Manufacturers and Exporters and a member of Carney's advisory committee on Canada-US trade, said he was hopeful an agreement was near.
"The committee was informed this morning that the negotiations continue and that and we're close, and that's more positive than we've seen in some time," Darby said.
Darby said businesses were hoping the agreement would mark a step back towards the terms of the North American Free Trade Agreement, since renamed the US-Mexico-Canada Agreement, under which most goods moved tariff-free across the three countries.
"Let's hope that whatever they have to negotiate gets us closer to that," he said.
How did the talks get here?
The latest push for a deal followed weeks of tense back-and-forth. As reported in earlier coverage, Carney faced a tight deadline to secure an agreement in Washington before a tariff cutoff, with the two sides still far apart on autos, dairy and alcohol as of 18 August 2026. Trump then paused the threatened 50% tariff for three days, citing progress in the talks and floating the possibility that a deal could also revive the Keystone XL pipeline project.
Earlier reporting had indicated that Canada was weighing removing its tariffs on US autos and allowing American alcohol back onto provincial shelves in return for relief on US steel and aluminium duties, according to . also reported that Canada had rejected an earlier US tariff offer as insufficient, citing Canadian broadcaster CBC.
What happens next?
The three-day pause on the threatened 50% tariffs is due to expire at the end of Friday, 21 August 2026, according to Yahoo Finance. reported that the next hard deadline falls at 12:01am ET on Saturday, 23 August 2026, when tariffs on an estimated $20 billion of Canadian goods are scheduled to take effect automatically if no final agreement has been reached by then.
Carney's meeting with cabinet ministers and provincial leaders on Wednesday afternoon is expected to shape how quickly Ottawa can move to finalise the terms before that deadline arrives.
- Negotiators met for a third consecutive day on Wednesday, 19 August 2026, after Trump paused new tariffs he had threatened to impose overnight.
- Trump's proclamation cited Canadian commitments on dairy, alcohol and motor vehicle duties, according to .
- Canada was seeking to cut the US auto tariff to 10%, while an earlier US proposal reportedly involved lowering it from 25% to 15%, or 7.5% for vehicles with higher American content.
- A Leger poll found 56% of Canadians wanted a hardline approach in the negotiations.
- The paused tariffs are due to expire on 21 August 2026, with a broader $20 billion tariff package scheduled to take effect on 23 August 2026 absent a final deal.
