US and Canada step up trade talks, but a deal is not close
Washington and Ottawa have talked more often over the past week about tariffs, yet neither side has dropped its original demands. Sources say a settlement is likely weeks or months away.
The United States and Canada have stepped up their trade talks over the past week, but neither side has offered meaningful concessions. The contacts resumed after US President Donald Trump and Canadian Prime Minister Mark Carney spoke by phone on Oct. 21. Because tariffs affect one of the world's largest trading relationships, the outcome matters for both economies, especially the auto and metals industries.
What is happening in the talks
US Commerce Secretary Howard Lutnick and Canadian Trade Minister Dominic LeBlanc have spoken regularly since the call, according to two people with knowledge of the talks. Lutnick helped derail an earlier round of negotiations over the summer. The main topic is Trump's tariffs on sectors such as autos and steel. A senior Canadian government official said the talks were still informal on Tuesday. Carney described the increase in activity as "un petit intensification."
At a rally in Michigan on Sunday, Trump said the dispute would be "settled pretty soon." Kevin Hassett, director of the National Economic Council, said the two sides are "very close" to a deal.
Unresolved issues
According to half a dozen current and former officials, industry representatives and others, neither side has dropped its original demands. Canada wants lower auto tariffs, while Trump is pressing for greater access to Canada's alcohol and dairy markets. The previous round stalled over whether the US would lower tariffs on heavy-duty trucks, some of which are built in Ontario. An industry official said Lutnick remains reluctant to negotiate on sector-specific tariffs.
Sources suggest the recent outreach may be a White House effort to ease Republican worries ahead of the midterm congressional elections rather than a sign of an imminent deal. Carney, who is doing well in domestic polls, has little political incentive to make concessions now. In a few days he will host European Union leaders in Montreal.
Background
After returning to the White House, Trump targeted Canada with new tariffs in 2025. This summer a preliminary deal collapsed at the last minute, and the two countries then imposed 50% duties on about $20 billion worth of goods. Trump has also threatened harsher duties in January. Canada's ambassador to the US, Mark Wiseman, said a longer timeline must be considered but that a deal will come.
