Canada and the United States are circling a deal to ease tariffs on Canadian steel and autos, and Prime Minister Mark Carney says any progress is happening because Washington is moving toward Ottawa, not the other way around. Negotiators are working on an agreement covering duties imposed under Section 232 of United States trade law, which currently includes a tariff of up to 50 percent on Canadian steel and 25 percent on autos, according to Reuters reporting that cited two United States and four Canadian sources. Carney told reporters in Ottawa on Monday that there had been a slight intensification in talks, and that Ottawa had not changed its stance since talks collapsed in August. To the extent any progress has been made, he said, it is because the United States is coming closer to our position.
What Ottawa will not sign
Carney was explicit about the limits. He said Canada had very clear bottom lines and red lines, which meant it was not willing to sign what was offered in August, and that Canada remains ready to sign an agreement that is in the interests of Canadians, all Canadians. The talks are centred on the Commerce Department rather than the United States Trade Representative’s office, putting Commerce Secretary Howard Lutnick at the centre of the negotiations alongside Dominic LeBlanc, the minister responsible for Canada United States trade, with whom Lutnick has been in regular contact. One Canadian source briefed on the negotiations told Reuters a deal was possible before the November 3 midterm elections, while United States sources said the Trump administration wanted Canada to make further concessions. Trump has previously announced he would raise tariffs on steel and auto imports from Canada to 50 percent from January 1, 2027, a deadline that gives both sides a reason to talk and a reason to posture.
Why the midterms matter to the talks
The tariffs have already become an issue in closely watched Senate races ahead of the elections. In Michigan, Republican candidate Mike Rogers said in a campaign advertisement that Canada was not our enemy and called for an end to the trade dispute. In Maine, Republican Senator Susan Collins urged the Trump administration to ease tariffs on Canadian goods used by farmers and other businesses, and Washington announced exemptions on Friday. The politics cut both ways: a deal before November 3 would let the administration claim progress, while a deal that looks like a concession to Ottawa would invite criticism from tariff supporters. Carney, meanwhile, is scheduled to host European Union leaders in Montreal on Thursday and Friday to pursue closer economic and security ties, with European Commission President Ursula von der Leyen proposing to make Canada the European Union’s first associate member, although that status has yet to be defined. The Canada United States tariff talks are therefore not just a trade negotiation. They are a test of whether Ottawa’s strategy of holding its red lines while diversifying its partnerships can produce a deal on Canadian terms, or whether the deadline pressure of January 1 will force a compromise Ottawa has so far refused to make.
