Canada prepares alcohol-ban concessions to avoid Trump's 50% tariff threat

Canada is preparing to make significant trade concessions to the U.S., including ending provincial bans on American alcohol sales, according to sources with knowledge of ongoing negotiations.

U.S. President Donald Trump has threatened a new 50 per cent levy on hundreds of Canadian imports by August 19, citing complaints about provincial booze bans, dairy import quotas, and the auto tariffs imposed last year. The Canadian side is willing to offer movement on those concerns, sources said.

Beyond lifting the alcohol bans, Canada is considering reducing retaliatory tariffs on U.S. autos and making unspecified changes to its dairy sector. In exchange, Canada is pushing for the U.S. to drop the new 50 per cent tariffs, provide relief from existing sectoral tariffs on steel, aluminum, lumber, and autos, and issue a joint announcement that talks on the Canada-United States-Mexico Agreement will resume in the fall.

Canada-U.S. Trade Minister Dominic LeBlanc and chief trade negotiator Janice Charette met with U.S. Trade Representative Jamieson Greer in Washington on Thursday. LeBlanc described the meeting as "constructive and detailed." Both sides have agreed to hold daily meetings at various levels until the August 19 deadline.

The sources said the Canadian negotiating team has stressed to American counterparts that the August 19 date represents a "cliff-type moment"—if tariffs take effect, political appetite to continue talks will diminish sharply.

American negotiators have flatly indicated that sectoral tariffs on steel, aluminum, lumber, and autos will not be removed entirely, though reductions may be possible. The specific changes Canada is considering for dairy tariff-rate quotas remain undisclosed.