The United States and Canada are working on a deal to ease American tariffs on Canadian steel and autos, Reuters reported on October 26, citing sources on both sides, with a Canadian source saying a steel and auto deal was possible before the November 3 elections.
The United States and Canada are working on a deal to ease American tariffs on Canadian steel and autos, Reuters reported on October 26, citing two American and four Canadian sources. The talks focus on tariffs imposed under Section 232 of American trade law, including up to 50% on Canadian steel and 25% on autos, with negotiators discussing potential relief from those duties.
One Canadian source briefed on the negotiations said a deal on steel and auto tariffs was possible before the November 3 elections, while American sources said the Trump administration wanted Canada to make further concessions. Because the Section 232 tariffs are administered by the Commerce Department, Commerce Secretary Howard Lutnick rather than the United States Trade Representative's office is at the centre of the talks, and Lutnick and Canada's Dominic LeBlanc, the minister responsible for Canada-United States trade, have been in regular contact.
Prime Minister Mark Carney, speaking to reporters on October 26, said there had been a slight intensification in talks on a revised cross-border trade pact, but played down prospects of an imminent deal. He said there was no change in Canada's position and that a deal was possible so long as Washington moved toward Canada's demands, including tariff relief on steel, aluminum and automobiles. President Donald Trump said at a Michigan rally over the weekend that an agreement could be reached soon, without elaborating.
The talks are reported on the basis of unnamed sources who spoke on condition of anonymity because the negotiations are private, and neither government has announced a deal. LeBlanc's office confirmed only that Canada remains in constructive dialogue with Washington and stands ready to work in good faith toward a more mutually beneficial trading relationship. Carney's public remarks confirm a pickup in talks, not an agreement.
The talks come as the two governments try to repair relations that soured after trade talks broke down in August, when both sides accused the other of last-minute demands. Since then the United States and Canada have added duties on some of each other's products, and Trump has vowed to double the existing tariff on Canadian-made motor vehicles to 50% starting January 1.
For Canadian steel and auto producers, relief before the November 3 elections would change the cost outlook for the final quarter, while failure would leave the January 1 auto-tariff threat in place. The next signal to watch is not another anonymous report but a statement from either government confirming terms, or silence that suggests the pre-election window has closed.