Canada trade deal near, Trump says as steel, auto talks resume

A campaign-stage promise

At a campaign rally in Port Huron, Michigan, on Sunday, October 25, President Donald Trump said the United States would reach a trade agreement with Canada "pretty soon." The election was nine days away.25 He claimed Ottawa was "willing to give us anything at this moment." He also repeated his charge that Canada had been "ripping off the United States for years" and defended the tariffs that set off the dispute.15 Port Huron sits on the border, and the trade war has hit the town hard.1 Trump told the crowd, "I had to do it," but he did not say what concessions Canada might offer, what a deal would contain or when it would be signed.10

The venue explains a lot. Trump carried the area around Port Huron with more than 66 per cent of the vote in 2024, but its economy depends on the Detroit auto industry, and the tariff standoff has hurt it.10 On the same Sunday, Republican Senate candidate Mike Rogers, who faces Democrat Abdul El-Sayed in a tight Michigan race, told NBC that "the automobile portion of these Canadian tariffs worries me a little bit."10 Taken together, Trump's comment works as both a negotiating signal and a pitch to voters. The coverage suggests the second purpose matters more, at least until a text appears.

How the talks fell apart

The current round only makes sense against the August collapse. Late that month, both governments were hailing a framework deal. Sources said it would cut U.S. tariffs on Canadian steel and aluminum from 50 per cent to 25 per cent and the headline tariff on Canadian-built vehicles from 25 per cent to 15 per cent.11 Then the talks failed. Prime Minister Mark Carney said Washington had asked for terms that would "destroy" Canada's auto, steel and aluminum industries.13 Ontario Premier Doug Ford, who had been briefed, called it a "bad deal."13

The two sides tell different stories about who blew up the deal. According to detailed accounts, the final hours turned on Canadian rules that promote French-language content online, U.S. demands to set Canada's steel tariffs on other countries, and Canadian requests for better treatment of autos, electric vehicles and metal products.18 U.S. officials said Canada made last-minute changes, including a push to lower an agreed floor on auto tariffs from 7 per cent to zero.18 Reporting also identified Commerce Secretary Howard Lutnick as a hardliner who stepped in on behalf of U.S. steel and aluminum producers lobbying to keep their protection.18 The White House denied that his stance sank the talks.18

After the breakdown, Trump vowed to raise tariffs on Canadian cars, trucks, auto parts and steel to 50 per cent starting January 1, 2027.1618 The penalties imposed after the collapse covered about US$20 billion in goods, from hockey sticks to cement.15 Canada hit back with duties on a similar amount of American products, up to 50 per cent on roughly 700 items. Trump answered with another round of tariffs of up to 50 per cent.412

The talks now cover less ground

The biggest change since August is the scope. Reuters, citing two U.S. and four Canadian sources, reported that the two governments are working on relief from Section 232 tariffs: up to 50 per cent on Canadian steel and 25 per cent on autos.16 The Commerce Department administers those duties, so Lutnick, not the U.S. Trade Representative, is at the centre of the talks. He has been in regular contact with Canada-U.S. Trade Minister Dominic LeBlanc.1619 A USTR official said the trade office has also been talking with Ottawa about the overall structure of a deal.16

The narrower focus may make a deal easier. One U.S. industry source said most major issues were settled in August, so a deal could come together quickly if the political will is there.17 Two U.S. industry sources said the sides appear to have found a landing zone on auto tariffs and agreed on some digital trade issues. One said Washington wants a matching auto deal with Mexico.17 A Canadian source said that if a deal happens, "it'll happen fast," but expected "a narrowed deal, if it even happens."20

Different accounts of how close a deal is

This is where the reports diverge most. The White House sounds confident. National Economic Council Director Kevin Hassett said the sides are "very close" and that talks are "gathering steam."8 He blamed the earlier impasse on Canada's election and an Alberta separatist push that made it "essentially impossible to negotiate with the Canadians."8 Albertans recently voted against holding a binding referendum on leaving Canada.8

Ottawa is far more cautious. Carney described only a "slight intensification" of contact and said his government's position has not changed. "To the extent any progress has been made, it's because the U.S. is coming closer to our position," he said.1617 He said Canada still has "red lines" that ruled out the August offer. In August he had said Washington's "signature was written in pencil." Asked whether a new U.S. signature would be in pen, he said: "I don't know that."17 A senior Canadian official told POLITICO the talks were still informal as of Tuesday.19 Another Canadian official said no documents had been exchanged and no negotiators sent to Washington.17 Business leaders are hedging too. Canadian Chamber of Commerce CEO Candace Laing said her group was told a deal by November 3 is "a possibility – not necessarily high likelihood."17

One U.S. source added a practical objection: Canada would need meaningful relief on autos and metals, and that is unlikely to be offered a week before the election.17 On balance, the reporting supports a cautious reading. Contact has increased, but Trump's "pretty soon" runs ahead of what either government has put on paper.

The Maine exemptions

The best evidence of what is driving the White House came on Friday, October 23. Trump signed an order removing 50 per cent tariffs from some Canadian products after a request from Republican Senator Susan Collins of Maine, who faces a hard re-election race.516 Exempted goods include seaweed, packing boxes and some plywood. Other reports also list paper products, machinery and refrigeration equipment. The changes take effect October 30.814

The administration did not reduce overall pressure, though. While it dropped those items, it added cocoa powder, vinyl flooring and shampoos to the 50 per cent list.8 Canadian businesses felt that right away. The head of hardwood flooring maker Preverco said the new levy means "overnight, we're losing 25 per cent of our business."8 Flavio Volpe of the Automotive Parts Manufacturers' Association called the Collins move "instructional": the White House will bend when the midterms are at stake.17 That reading looks right. The exemptions were aimed at particular voters, not at Canada, and Ottawa should not treat them as a sign of a lasting deal.

The political math adds pressure on Trump. A Reuters/Ipsos poll completed October 26 put his approval at 32 per cent, and Democrats led the generic congressional ballot 47 to 36 among registered voters.14 Trump wants to show voters he is lowering the cost of living, and a deal with Canada would help him make that case.17

Why the details matter

Any deal will depend on the specific terms for steel and autos. Parts in a typical vehicle can cross the Canada-U.S. border up to eight times before final assembly, and more than 90 per cent of Canada's finished-vehicle exports have historically gone to the United States.14 That means tariffs can be charged at several stages of production. Aluminum has its own problem: one industry voice said U.S. buyers pay roughly $1,500 a ton more than European buyers because of the tariff.15

Ottawa is also preparing in case talks fail again. On October 21, Canada and Ontario announced an $8.7 billion industrial plan that includes more than $5.2 billion for steel and $2.5 billion for auto manufacturing.14 Carney has set a goal of doubling exports to non-U.S. markets within a decade.14 Even a deal would not settle the wider relationship. The first 2026 review of the U.S.-Mexico-Canada trade agreement (CUSMA) ended without Washington agreeing to renew it in its current form, and another review is expected in 2027.14

Outlook

A steel-and-auto deal before November 3 is possible but not likely. Both sides would face a timing problem. Each government would want proof that the other is lowering barriers before giving up leverage that took months to build.14 Canada can afford to wait: its counter-tariffs target goods from states that backed Trump, and its industries are getting domestic support.1214 Washington's deadline is the election. For businesses on both sides of the border, the important question is less whether Trump announces a deal than whether it is written to last.