Washington and Ottawa have increased the tempo of their trade talks over the past week, after President Donald Trump and Prime Minister Mark Carney spoke by phone on Oct. 21. Commerce Secretary Howard Lutnick, who helped torpedo a previous round of negotiations over the summer, and Canadian Trade Minister Dominic LeBlanc have been speaking regularly since then, according to two people with knowledge of the talks, granted anonymity because they were not authorized to speak publicly. They have primarily discussed Trump’s tariffs on sectors like autos and steel that have been a sticking point for Canada all along.
A senior Canadian government official told POLITICO that talks remain informal as of Tuesday. The uptick in engagement — what Carney called “un petit intensification” speaking in French to reporters in Ottawa Monday — has triggered a flurry of headlines on both sides of the border as well as White House boasts that a deal is near. The North American trade spat will be “settled pretty soon,” Trump predicted at a rally Sunday in Michigan.
But unlike Trump, Carney has little political incentive to make concessions at the moment — or bail out Trump right before congressional elections heavily focused on affordability, including tariffs’ impact on prices. The Canadian prime minister is riding high in domestic polls after standing up to the American president and walking away from trade negotiations in August. And he is days away from welcoming European Union leaders to Montreal for a landmark summit aimed at deepening their alliance — and building an implicit counterweight to the U.S.
Neither side, moreover, has dropped its original demands, according to half a dozen current and former government officials, industry representatives and others with knowledge of the talks. Those outstanding sticking points include Carney’s ask for lower auto tariffs and Trump’s push for increased access to the Canadian alcohol and dairy markets. The lack of new concessions or tangible breakthroughs is a sign that the recent flurry of outreach may be more of a White House effort to soothe Republicans’ midterm worries — particularly in border states whose economies are tightly connected to Canada’s — than to secure an immediate deal.
The people say any denouement between the two countries is likely weeks if not months off, even as they expect the two North American neighbors to ultimately hammer out an agreement to lower tariffs and stabilize one of the world’s largest trading relationships. I mean, first of all, we made a deal with Canada. They reneged on the deal,” Sen.
Bernie Moreno (R-Ohio) said in an interview. Asked if the deal will come before the election, Moreno said, “I don’t know.” Canada has also been cautious about promising that a deal is near. Carney said last week Ottawa doesn’t care about “the timing” of an agreement to roll back tariffs on each other’s imports.
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