By Promit Mukherjee
OTTAWA, Aug 17 (Reuters) - Canada is approaching an August 19 deadline for new 50% U.S. tariffs on a range of its exports and intensifying negotiations as Prime Minister Mark Carney and his trade team seek to avert the duties.
U.S. President Donald Trump has said the tariffs are in response to Canada's retaliatory duties on U.S.-made cars, its dairy supply management system and decisions by some provinces not to stock U.S. alcohol.
The new tariffs would not qualify for exemptions
under the U.S.-Mexico-Canada Agreement and could hit industries including lumber and wine particularly hard.
Last month, Trump also declined to extend the USMCA, leaving the pact subject to annual reviews after the three countries were unable to resolve a number of trade disputes, including U.S. complaints over non-tariff barriers.
Below are some of the issues the U.S. Trade Representative's Office highlighted in its 2026 National Trade Estimate report on Canada.
DAIRY AND SUPPLY MANAGEMENT
Washington has criticized Canada's supply-managed dairy, poultry and egg sectors, saying production quotas and tariff-rate quotas limit access for U.S. exporters. Canada imposes tariffs that can exceed 200% on imports above quota levels.
The U.S. has also complained about Canada's administration of dairy import quotas created under USMCA and raised concerns over milk pricing policies and market access for U.S. dairy products. Prime Minister Mark Carney's government has said previously that supply management will not be on the negotiating table.
BUY CANADIAN POLICIES
The U.S. says Canada's new Buy Canadian initiative gives preference to Canadian firms and domestically produced steel, aluminum and wood in major government contracts.
Washington has also objected to measures adopted by provinces including Ontario, Quebec and British Columbia that restrict or disadvantage U.S. suppliers in procurement competitions.
WINE, BEER AND SPIRITS
Most Canadian provinces control alcohol distribution through government-run liquor boards, which the United States says impose barriers ranging from listing restrictions and pricing rules to distribution requirements.
The issue became even more contentious after several provinces stopped distributing U.S. alcohol products in response to Trump's tariffs imposed on goods from Canada last year. Ontario Premier Doug Ford has refused to put U.S. liquor back on shelves unless tariffs are removed or a new trade deal is reached.
DIGITAL SERVICES TAX AND ONLINE STREAMING
The U.S. continues to monitor Canada's digital services tax, which Ottawa pledged to repeal but had not formally eliminated by the end of 2025, the March report from USTR said.
Washington has also raised concerns about Canada's Online News Act, which requires major digital platforms to compensate Canadian news organizations, and online streaming rules that require certain services to contribute to Canada's broadcasting system. Canada's government has signaled it will back off plans to force entertainment companies such as Netflix to contribute to Canadian productions, saying it doesn't want consumers to face higher costs.
AGRICULTURE AND SEEDS
The U.S. says Canada's seed registration system is slow and cumbersome, limiting market access for some U.S. seed and grain exports.
Washington also continues to object to restrictions affecting imports of certain fresh fruits and vegetables.
INTELLECTUAL PROPERTY
Canada remains on the U.S. Trade Representative's Watch List for intellectual property protection.
The U.S. cites concerns about counterfeit and pirated goods, including sales at Toronto's Pacific Mall, as well as issues related to patent protections and geographical indications.
LABOR ENFORCEMENT
While Canada has adopted measures intended to block imports produced with forced labor, Washington says enforcement remains insufficient and could allow such goods to enter the Canadian market.
Earlier this month, Canada introduced new legislation to strengthen the ban on importing goods produced with forced labor.
ALBERTA ENERGY MARKET
The U.S. says Alberta's electricity market continues to disadvantage U.S. power producers. Washington says stakeholders have complained that electricity generated in neighboring Montana is given lower priority than equally priced power produced in Alberta, limiting access to the province's energy market.
PHARMACEUTICAL PRICING
Washington says Canada's Patented Medicine Prices Review Board unfairly depresses prices for innovative medicines by excluding the United States and Switzerland from the basket of countries it uses to benchmark patented drug prices. U.S. industry argues the approach artificially reduces the value of innovative medicines in the Canadian market.
(Reporting by Promit Mukherjee; Editing by Caroline Stauffer, Sanjeev Miglani and Hugh Lawson)
