Canada faces a 50% U.S. tariff in less than two weeks

Canada faces a 50% U.S. tariff in less than two weeks — here's what changes for shoppers first

Canada and the United States are racing to strike a deal before a new 50% U.S. tariff on roughly US$20 billion of Canadian exports takes effect at 12:01 a.m. on August 19. For most Canadians, that headline number sounds like a problem for exporters and factory towns, not for the person filling a shopping cart or shopping for a car.

Buried in the negotiations are a handful of concessions Ottawa is reportedly willing to make that could show up in Canadian stores and car lots well before any tariff deadline hits. Here is what could actually change for consumers — and roughly when.

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What Ottawa is offering to give up

Based on reports from CBC, Canada is considering an end to provincial bans on American alcohol; there are also discussions about lifting its retaliatory tariff on American-made vehicles, and adjusting how it allocates dairy import quotas. These concessions would be in exchange for the U.S. dropping the new 50% tariff and easing duties on steel and aluminum.

As Canadians near the middle of August — with only a few weeks before kids go back to school — none of the trade discussions and concessions have been finalized; the two sides have exchanged written positions but have not reached an agreement, according to Bloomberg. Talks are continuing daily and expected to continue right up to the Aug. 19 deadline.

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Could booze and auto prices shift first?

While Mark Carney and his federal ministers are leading the trade talks with the U.S., not all concessions are within the federal government mandate. For instance, the restocking of American alcohol is actually a provincial call, not a federal one, so any change would need provincial buy-in; it would also mean a rollout would occur unevenly across the country, if at all. Some premiers, including British Columbia's David Eby, have said there is no chance U.S. alcohol will return to provincial liquor store shelves, regardless of what Ottawa negotiates.

For those regions that will comply, consumers shouldn't expect a dramatic drop in liquor and alcohol prices. Instead, you can probably expect wider selection. That's because the U.S. alcohol bans mainly reduced choice rather than raising prices.