Canada's Carney speaks with Trump as new 50% tariffs set to take effect at midnight

Canadian Prime Minister Mark Carney spoke with President Donald Trump on Monday, according to Carney's office, as Canada seeks a trade agreement that would avert new 50% tariffs, which are set to take effect at midnight on Wednesday. 

Existing U.S. tariffs on automobiles are a stumbling block, according to Reuters, which cited unnamed sources. Negotiators on both sides have discussed cutting the tariffs on Canadian vehicles from 25% to 15%, with further reductions based on the amount of U.S.-manufactured parts in each vehicle. 

How that content is calculated is a point of contention. Washington wants only American-made parts deducted from the calculation, while Canada wants to include all North American-made parts, which would include Canadian- and Mexican-manufactured parts. 

The new tariffs target about $20 billion worth of imports. These tariffs will be imposed even on products that qualify for preferential treatment under the U.S.-Mexico-Canada trade agreement, which has shielded much of Canadian industry from ​earlier U.S. tariffs.

Carney's office said on Tuesday that Carney and Trump spoke by phone about ongoing trade negotiations, but no further details were provided.