Canada and the United States are facing challenges in reaching a tariff deal as the deadline set by President Donald Trump approaches. Two sources familiar with the trade discussions revealed that Canadian officials are not content with the latest offer presented by the U.S. side.

The Americans put forth a new proposal on Tuesday to reduce some sectoral tariffs, but the extent of the reduction falls short of Canadian expectations. Negotiators have been engaged in ongoing discussions in an attempt to strike a deal before the looming deadline of August 19, when Trump plans to impose a 50 percent tariff on numerous Canadian goods in addition to the existing sectoral tariffs.

Key areas of interest for the U.S. include gaining preferential access to Canadian critical minerals, as well as addressing security and energy concerns. Canada’s Trade Minister, Dominic LeBlanc, has met with U.S. Trade Representative Jamieson Greer multiple times in recent weeks to navigate the negotiations and potentially offer a trade deal proposal to Trump.

It has been emphasized to the American counterparts that there would be little support among Canadians to continue talks if the August 19 tariffs are implemented. Both sides have committed to daily meetings at various levels leading up to the deadline.

While LeBlanc and Charette continue their discussions in Washington, they are not only striving to prevent new tariffs but also seeking relief from existing tariffs imposed by the U.S. on Canadian steel, aluminum, lumber, and automobiles. Additionally, Canada hopes that the ongoing trade talks will lead to the renewal of the Canada-U.S.-Mexico Agreement (CUSMA), especially after the Trump administration declined to extend the deal beyond 2036 last month.

Conservative Leader Pierre Poilievre has urged for a robust stance in the negotiations, emphasizing the importance of securing a favorable deal that includes zero tariffs on softwood lumber, an end to sectoral tariffs on steel and aluminum, a tariff-free auto pact, and exemption from Buy America rules on infrastructure projects.

Industry sources suggest that Canada is prepared to meet certain U.S. demands, such as lifting the alcohol bans, in exchange for tariff relief. The discussions remain crucial as the deadline approaches, and both sides work towards finding common ground to avoid escalating trade tensions.