US, Canada negotiate deal to ease steel, auto tariffs

The United States and Canada are negotiating a deal that would ease US tariffs on Canadian steel and autos, according to two US sources and four Canadian sources who spoke to Reuters. One Canadian source said an agreement could come before the November 3 midterm elections. The talks are the most serious attempt to repair relations since negotiations collapsed in August. They come as Republican candidates in border states press President Donald Trump to end the trade war.reuters.com

Talks focus on Section 232

The negotiations cover tariffs imposed under Section 232 of US trade law, which include a levy of up to 50% on Canadian steel and 25% on autos. Because the Commerce Department administers those duties, Commerce Secretary Howard Lutnick, rather than the US Trade Representative's office, is leading for Washington. He has been in regular contact with Dominic LeBlanc, Canada's minister for Canada-US trade. US sources said the administration wants more concessions from Ottawa. A Canadian industry source said any deal "will happen fast" but would likely be narrow, "if it even happens".reuters.com

At a rally on Sunday, October 25, in Port Huron, Michigan, a border town hurt by the tariffs, Trump said, "We'll have that settled pretty soon. They're willing to give us anything at this moment". National Economic Council Director Kevin Hassett told Fox News Sunday that the two countries were "very close." He said the negotiations are "gathering steam". Hassett blamed the earlier impasse partly on Alberta's separation vote, which he said made it "essentially impossible to negotiate with the Canadians".ctvnews.ca+1

LeBlanc's office said Canada "remains in constructive dialogue with our U.S. counterparts on a range of priorities". Prime Minister Mark Carney said last week that Canada was "ready to drop everything, sit down, and negotiate this afternoon if the Americans are ready in good faith".bnnbloomberg.ca+1

Months of escalation

Talks fell apart in August over issues including duties on medium- and heavy-duty vehicles, which matter to Canadian factories. The tariffs that followed hit about US$20 billion in goods, and Canada answered with matching levies. Trump has also said tariffs on Canadian steel and autos will rise to 50% on January 1, 2027.afp.com+1

On Friday, October 23, Trump removed 50% tariffs on some Canadian agricultural and forestry products after a request from Maine Senator Susan Collins, who faces a tough re-election race. The White House put new duties on goods such as cocoa powder, vinyl flooring and shampoo at the same time. Sources warned that any agreement remained far from certain, given past swings by Trump's trade team.ctvnews.ca+2