The United States and Canada are reportedly working on a deal to reduce tariffs on Canadian steel and autos in a recent attempt to repair strained relations.
As reported by Reuters citing sources privy to the matter, the US and Canada are negotiating a potential deal to relieve the US Section 232 tariffs, which include duties up to 50% on Canadian steel and 25% on autos.
The talks aim to repair bilateral diplomatic and trade relations that deteriorated following the collapse of broader trade negotiations in August.’’’
The US sources note the Trump administration is pressing Canada for additional concessions though Trump indicated at a recent rally that the dispute would be resolved soon.
Industry insiders expect any near-term outcome to be a targeted, narrowed deal rather than a comprehensive trade agreement.
As per the sources, because Section 232 tariffs fall under the U.S. Commerce Department’s authority, Commerce Secretary Howard Lutnick is leading negotiations alongside Canadian Minister Dominic LeBlanc.
Regular discussions are also being held between the U.S. Trade Representative (USTR) office and Canadian counterparts regarding broader trade architecture.
A spokesperson for LeBlanc said in a statement, “Canada remains in constructive dialogue with our U.S. counterparts on a range of priorities. We stand ready to work constructively and in good faith towards a more mutually beneficial trading relationship that respects Canada’s interests.”
Canadian PM Mark Carney noted a slight intensification in tariff talks, suggesting that the progress is due to America’s willingness to move closer to Ottawa’s position while the latter one sticks to its original stance.
“To the extent any progress has been made, it’s because the U.S. is coming closer to our position,” Carney said.
However, White House has not yet responded to this report.
Possibility of deal?
Canadian sources suggest an agreement on steel and auto tariffs could be reached prior to the upcoming November 3 midterm elections.
Another source said that the deal could come quickly but it would be narrow in nature. “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 talks between US and Canada broke down in August over the deadlock on cutting duties on medium- and heavy-duty vehicles that are critical for Canadian factories.
