Kathmandu— Canadian officials are urgently seeking a resolution with the United States to avert the imposition of significant tariffs set to take effect this week. With a Wednesday deadline looming, President Donald Trump’s administration plans to implement a 50-percent duty on approximately $20.2 billion in Canadian exports – encompassing goods like electronics, machinery, furniture, dairy, and wine. The move stems from US claims of unfair trade practices regarding automobiles, dairy, and alcohol, despite the majority of US-Canadian trade currently being tariff-free under the United States-Mexico-Canada Agreement (USMCA). Negotiations are ongoing, but complicated by provincial concerns and a history of strained relations.

Tariff Threat to Canadian Economy

The proposed tariffs threaten substantial economic disruption for Canada, with over 5 percent of its exports to the US potentially impacted. Julian Karaguesian, a trade expert at McGill University in Montreal, warned that “tariffs of 50 percent would effectively price hundreds of Canadian goods out of the US market.” The Center for Strategic and International Studies estimates the affected goods are worth $20.2 billion annually. Canada relies heavily on exports to the United States, with approximately 70 percent of its total exports heading south – a significantly larger proportion than the 30 percent of US exports that go north.

Provincial Concerns Complicate Negotiations

Ottawa’s efforts to secure a deal are further complicated by the need to gain consensus from Canada's ten provinces. A key sticking point involves provincial-level restrictions on the sale of American alcoholic beverages, implemented in retaliation for previous Trump administration tariffs. While some premiers, like Ontario’s Doug Ford, have signaled willingness to lift these bans if the US relents, others remain hesitant. Quebec Premier Christine Frechette has firmly stated that Canada's supply management system for dairy, eggs, and poultry is “non-negotiable”.

Deepening Ill Will Among Canadians

Beyond the economic implications, Trump’s trade policies have fostered significant resentment among Canadian consumers. A recent Nanos Research poll revealed that 69 percent of Canadians are unlikely to purchase US-made alcoholic beverages even if they become available again. This sentiment extends beyond the president himself, with an Angus Reid Institute poll showing 48 percent of Canadians holding an unfavorable view of Americans generally – compared to 45 percent who hold a positive impression. Trade expert Ian Lee from Carleton University notes that many Canadians oppose any concessions to Trump, prioritizing principle over access to the US market.

Diversification Efforts Underway

Even as negotiations continue, Canada is actively pursuing strategies to reduce its reliance on the US economy. Prime Minister Mark Carney announced in September a new trade diversification strategy focused on expanding markets in Asia and other regions, acknowledging a “rupture” in the global economic landscape. Saibal Ray, a supply chain management expert at McGill University, suggests that restricting energy exports could be a powerful leverage point for Canada, but acknowledges the potential domestic consequences of such a move.

Prime Minister Carney has indicated he expects to speak with President Trump before the Wednesday deadline and maintains Canada is negotiating from “a position of strength.” Regardless of the outcome this week, Canada appears committed to diversifying its trade relationships in the long term.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.