The clock is ticking on a trade deal between the U.S. and Canada, and neither side has signed anything yet.
Washington and Ottawa spent Friday huddled in negotiations, trying to finalize an agreement before a midnight deadline. If they miss it, 50% tariffs on about $20 billion in Canadian goods - things like hockey sticks and wine - kick in at 12:01 a.m. ET Saturday.
President Trump sounded hopeful Friday afternoon, telling reporters, "I think so. We'll see," when asked if a deal was done. He added that "we should be able to have a deal with Canada." But by 5:30 p.m. ET, negotiators still hadn't emerged from their Washington meeting with a completed agreement.
The talks have been messy from the start. Trump originally threatened the 50% tariffs to take effect Wednesday, then announced a three-day postponement on Truth Social. That gave negotiators more time, but sessions on Wednesday and Thursday wrapped up without a signed deal.
Canadian trade minister Dominic LeBlanc sounded optimistic Thursday, saying, "We're very close. We continue to make progress, and we're going to stay here and do the work that's necessary until we get to that point." His spokesperson said Friday that "intensive discussions" were continuing "for the mutual benefit of both countries."
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So what's the holdup? Negotiators haven't said exactly. LeBlanc's office declined to comment on how those metals tariffs are affecting the talks.
Trump has suggested the U.S. might lower duties on steel, aluminum, lumber, and possibly Canadian autos. He's also floated reviving the Keystone XL oil pipeline project from Alberta to Nebraska, which was canceled in 2021 under Joe Biden.
These 50% tariffs aren't your everyday trade policy. They were set using a seldom-invoked clause from a 1930 trade law. The fact that it's coming back now shows how far the two countries have drifted on trade.
The tariff threat is partly based on the U.S. accusation that Canada treats the American dairy industry unfairly. Canada hasn't confirmed that claim. The Trump administration says Canada has agreed to reduce trade barriers, but it hasn't given specifics.
Canadian Prime Minister Mark Carney said Wednesday that the agreement under discussion is meant to improve Canada's position and provide more confidence about future trade. He wrote on X that the two countries are "moving towards an agreement that reinforces that Canadian advantage, including by securing the best terms in each of Canada's most important strategic sectors."
Businesses on both sides of the border are watching this one closely. They've cautioned that the duties could severely impact their revenues, and the mere possibility of them has already created disruption. Uncertainty like this tends to ripple through supply chains and prices, and it can show up in your portfolio before you expect it.
Trump, for his part, has been clear about his priorities. Before boarding Air Force One, he said, "We have to take care of our farmers. Our farmers are very important to me." He also wrote on Truth Social that the tariffs on Canadian goods "will be nonexistent for our farmers," though that depends on the deal being finalized.
The bottom line: The two countries have until midnight to get this done. If they do, the tariffs stay off and the uncertainty lifts. If they don't, those 50% duties hit Canadian goods immediately, and the back-and-forth continues.
For investors, the lesson is simple: trade policy moves fast, and the effects land in your portfolio just as quickly.
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