Economy

Canada–U.S. tariff talks pick up, but Carney says there is no deal yet

Ottawa and Washington are talking again about U.S. tariffs on Canadian steel, aluminum and autos. The U.S. midterms are a week away, and no deal has been signed.

By John Wilson · October 27, 2026

Two months after the last round fell apart, Canada and the United States are talking trade again. Prime Minister Mark Carney told reporters in Ottawa on Monday that there has been a "slight intensification" in discussions with the Trump administration, but he gave no timeline for a deal. "To the extent any progress has been made, it's because the US is coming closer to our position," he said, according to Bloomberg.

This week Canadians also face a Bank of Canada decision on Wednesday, so the trade file is worth following. The talks will decide how much more Canadian industry pays to sell into its largest market.

What is on the table

This round is narrower than the deal that collapsed in the summer. Industry sources told The Globe and Mail that it focuses on the Section 232 tariffs, the U.S. national-security duties on autos, steel and aluminum. Commerce Secretary Howard Lutnick leads for Washington, and Dominic LeBlanc, the minister responsible for Canada–U.S. trade, leads for Ottawa.

White House economic adviser Kevin Hassett was the more upbeat of the two sides. "I think it's very close to finally having a deal on that," he told Fox News on Sunday. Not everyone in Washington agrees. A U.S. official told Bloomberg the outlook is still unclear because the U.S. does not think Canada is offering enough yet.

How we got here

Talks broke down on Aug. 21. The U.S. then imposed 50% tariffs on about $20 billion of Canadian goods, and Canada answered with counter-tariffs on a similar amount of U.S. products, Bloomberg reports. Carney has given three reasons for walking away. The U.S. refused tariff relief for medium- and heavy-duty trucks. It pushed for changes on French-language streaming content. And it proposed wording that Ottawa said could limit Canada's trade deals with other countries. U.S. officials dispute the last two points.

Carney says those red lines have not moved. "We have very clear bottom lines, red lines, which meant that we were not willing to sign what was offered in August," he said. Asked whether a U.S. signature on a new deal would be "in pen" this time, he replied: "I don't know that."

Reasons for caution

There are plenty of signs that a deal is not close. A Canadian official told The Globe and Mail that no documents have been exchanged and no negotiators have been sent to Washington. Canadian Chamber of Commerce CEO Candace Laing said she had been told a deal by Nov. 3, the day of the U.S. midterm elections, was possible but "not necessarily high likelihood." Flavio Volpe of the Automotive Parts Manufacturers' Association called the talks "a fertile opening" and said, "We will wait and see."

Markets showed no sign of pricing in a breakthrough. The S&P/TSX composite was up 227.33 points at 36,171.49 late Tuesday, helped by basic materials stocks. The Canadian dollar slipped to 71.24 U.S. cents from 71.30 on Monday, The Canadian Press reported.

What it means for you

Most households will not feel tariff talks directly. They feel them through jobs in Ontario and Quebec manufacturing towns, through the prices of goods that cross the border, and through the loonie. Lower Section 232 tariffs would ease pressure on auto and steel jobs. A failed round would keep it in place. Either way, an announcement could come quickly and then be revised, as the summer showed.

If your income depends on an export industry, this is a good time to check your emergency savings rather than wait for a headline. Investors who hold Canadian industrials or auto suppliers should expect news-driven swings in the coming week. This article is general information, not financial advice.

Sources

General news and information, not individualized financial advice. Figures reflect the publication date.