Canada's minister responsible for trade with the US said on Friday the two sides still had work to do, with just hours remaining before 50 per cent tariffs on Canadian imports were due to take effect.
"We are going to continue working up until the last minute. Our job is not finished," Dominic LeBlanc said as he emerged from US Trade Representative Jamieson Greer's office after hours of talks.
Top trade negotiators from Canada and the US are trying to finalise a trade deal which could help reduce previous tariffs and avert new duties threatened by President Donald Trump as his new deadline inched closer.
Trump has said he will impose a new 50 per cent tariff on about $20 billion worth of Canadian goods from Saturday if a deal is not reached.
The US president said earlier on Friday he expected the two countries to reach an agreement, though he provided no details. He also said the United States was starting work towards a trade deal with Mexico.
"I have dealt with the prime minister. I have got a good relationship... The deal with Canada is moving along, and we should be able to have a deal with Canada," Trump told reporters at Joint Base Andrews, Maryland, referring to Canadian Prime Minister Mark Carney.
A deal could mark a detente in what has been 18 months of tense relations that started when Trump imposed tariffs on key imports from Canada, prompting Ottawa to retaliate with a suite of countermeasures.
Earlier in the day, LeBlanc's office told Prime Minister Mark Carney's Advisory Committee on US economic relations that talks, which remained "complex and consequential," would continue throughout the day, according to an email seen by Reuters.
"I want to be direct with you about where we stand. This is an intense moment. The stakes are significant... That pressure is being felt by Canadians across the country, and those at the table are acutely aware of it," the email said.
Even if a deal is reached, Carney could find it hard to sell it to Canadians and the influential premiers of the 10 provinces.
An opinion poll showed on Wednesday that 56 per cent of Canadians want Carney to make no further concessions.
Sources say an agreement is expected to cut the tariff on Canadian-built vehicles to 15 per cent from 25 per cent and halve tariffs on Canadian steel and aluminum to 25 per cent. Ontario, a major steel and aluminum producer, wants the tariffs scrapped.
Carney is calling on major provinces to rescind their ban on sales of US alcohol, which is a major irritant for Washington.
Wab Kinew, the premier of Manitoba, said on Thursday Trump was "very weak" and Canada should take advantage.
"I think we've got the upper hand — they're back on their heels right now. They're coming to us for a deal, and so I think we should fight," he told reporters.
Canada, though, is less than a tenth the size of the US economy and sends around 70 per cent of all exports south of the border, which makes it uniquely vulnerable to punitive US trade actions.
US Vice President JD Vance mocked Carney on Wednesday, saying he "comes in and puffs his chest out and says, 'I'm going to, like, out-tough Donald Trump'."
Vance was speaking at a fundraiser in Southampton, New York.
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