Aug. 18 (UPI) — Canadian negotiators worked to avoid a midnight tariff deadline in Washington, D.C., Tuesday, hoping to strike a last-minute deal.

U.S. Trade Representative Jamieson Greer led the talks with Canadian representatives. He said last week that the negotiators were reviewing options and that he expects Canada to drop certain measures it’s taken already in response to the U.S. tariffs, The New York Times reported.

“If a country retaliates against us, we’re obviously not going to tolerate that,” Greer told reporters Friday. “We’ll take action. My sense is the Canadians want to have a more conciliatory approach, but we’ll see.”

President Donald Trump has threatened 50% tariffs on $20 billion worth of Canadian goods, including cement and hockey sticks. On Aug. 5, he called Canada “nasty” in a Las Vegas speech.

“Canada’s nasty. They are. They’re nasty,” The Times reported Trump said. “I love the people, but they’re nasty. Nasty leadership.”

Canadian Prime Minister Mark Carney and Trump spoke on the phone Monday, a Carney spokeswoman said. She didn’t give any details.

In July, the Trump administration said it would create new tariffs of 50% on more than 500 Canadian goods. That amount is up to $20 billion worth of trade annually, which is about 2% of the entire trade between the United States and Canada.

“President Trump is taking action to hold Canada accountable for its continued discrimination against and unreasonable and unequal treatment of U.S. commerce that has burdened and disadvantaged hard-working Americans,” the White House said in a statement at the time.

Canadian negotiators also want to ease the tariffs already imposed on its industries. There are tariffs of up to 50% on steel, aluminum and autos. Some tariffs also affect Canadian softwood lumber.

Canadian lumber manufacturing CEO John Brink told CTV that tariffs have devastated the lumber industry. He said, “most of the lumber industry in Canada is paying up to 45.16% in tariffs and duties combined. So the effect has been devastating.”

Brink said about half of British Columbia’s lumber manufacturing capacity has shut down.

“There used to be 800 secondary manufacturers in British Columbia alone. We are now down to about 50. Not all due to tariffs and duties, but due to a combination of (factors),” Brink added.

“I think the big question for the United States is: Are they even interested in securing an agreement, a deal, some kind of operational détente, or is Trump’s real objective just to flex? Is it just to demonstrate he’s in control? In which case, we’re chasing a phantom deal,” CTV News political commentator Scott Reid said.

He added that the deadline will be “the most important, most significant and most treacherous of Mark Carney’s political career.”

Greer has said he expects Canada to make concessions if a deal goes through. But not everyone in the north wants that.

“Canadians elected Mark Carney to both stand up to Trump while also trying to negotiate a deal, or negotiate down the tariffs, and I don’t think those are mutually exclusive, but it is a narrow path for sure,” said Brian Clow, a former senior official in Prime Minister Justin Trudeau’s government, The Times reported.

If no deal is made, expect the trade war to escalate, Clow said.

“If the U.S. decides to proceed with imposing these new tariffs tomorrow, Canada, although this current government has eased back on retaliation, will have to respond in some way,” he said.

Former senior White House trade adviser Kelly Ann Shaw told CTV that negotiations look “promising” for Canada.

“I’ve been involved in a number of international trade negotiations and other negotiations throughout my career, and the hardest issues always get resolved at the very last moment,” Shaw told CTV Tuesday.

“So I don’t expect any sort of announcement until later today, possibly as late as midnight,” Shaw said. “But the fact the two parties are still at the table, I take as a good sign.”