The United States and Canada are negotiating a possible agreement to reduce tariffs on Canadian steel and automobiles, as both countries seek to repair strained trade relations ahead of next week’s US midterm elections.
The discussions centre on duties imposed under Section 232 of US trade law, including tariffs of up to 50 per cent on Canadian steel and 25 per cent on automobiles.
Two US and four Canadian sources familiar with the negotiations said the governments were considering measures to ease the levies.
The talks come after trade negotiations between the neighbouring countries collapsed in August, amid disagreements over tariffs affecting key industries.
The dispute has increased costs for automakers and businesses that depend on the cross-border movement of vehicles and components.
A Canadian source briefed on the negotiations said an agreement could be reached before the November 3 midterm elections.
However, US sources indicated that President Donald Trump’s administration wanted Canada to make additional concessions before a deal could be finalised.
Canadian Prime Minister Mark Carney said discussions with Washington had intensified slightly but maintained that his government had not changed its position.
“To the extent any progress has been made, it’s because the US is coming closer to our position,” he told reporters, without providing further details.
A Canadian industry source cautioned that any agreement might cover only a limited range of issues rather than resolve the wider trade dispute.
“If it happens, it’ll happen fast. But my sense is it’ll be a narrowed deal, if it even happens,” the source said.
The negotiations are being handled in part by US Commerce Secretary Howard Lutnick because the tariffs fall under the Commerce Department’s authority.
Lutnick and Canada’s minister responsible for US trade, Dominic LeBlanc, have reportedly maintained regular contact in recent weeks.
A spokesperson for LeBlanc said Canada remained committed to discussions with Washington.
“Canada remains in constructive dialogue with our U.S. counterparts on a range of priorities,” the spokesperson said.
“We stand ready to work constructively and in good faith towards a more mutually beneficial trading relationship that respects Canada’s interests.”
An official from the Office of the US Trade Representative also confirmed that the agency and Canadian officials had been in contact in recent days to discuss the broader framework of a possible agreement and other trade matters.
The White House and the Commerce Department did not immediately respond to requests for comment.
Trump has previously announced plans to increase tariffs on Canadian steel and automobile imports to 50 per cent from January 1, 2027.
At a political rally on Sunday, he predicted that the trade dispute would be resolved “soon” but offered no details.
The tariff dispute has also become a political concern for Republicans ahead of the midterm elections, with candidates in US border states calling for an end to the trade conflict.
A Reuters/Ipsos poll published on Monday put Trump’s approval rating at 32 per cent, adding to concerns about his party’s prospects in the elections.
Meanwhile, Trump signed an order on Friday removing 50 per cent tariffs on certain Canadian agricultural and forestry products, a move expected to benefit businesses in the US state of Maine.
The proposed steel and automobile agreement would represent a further attempt by Washington and Ottawa to stabilise their trading relationship, although the outcome of the negotiations remains uncertain.
