Canada and US signal progress on trade deal talks as midterms loom

Canadian Prime Minister Mark Carney has said talks with US President Donald Trump made progress toward a future Canada-US trade deal. The announcement came on Sunday, two days before the November 3 US midterm elections, and follows months of strain between the two neighbours over tariffs. Carney said the two sides had held a good conversation about the future of Canada-US trade.

According to Carney, teams from both countries will work in the coming weeks to deliver an outcome. He said the latest discussion builds on recent constructive talks on the outlines of a mutually beneficial trade deal. Trump also said last week that he expected a new agreement with Canada to be reached pretty soon, although he gave no details.

The talks come after a period of escalating trade tension. In August, high-level negotiations between Ottawa and Washington broke down, and Trump imposed a 50% levy on $20bn of Canadian goods, equal to 5.5% of Canada's exports. Canada responded with equivalent tariffs on US steel, dairy, appliances, farm equipment, pulp and paper, and electronics.

The dispute has affected businesses on both sides of the border and has become a political issue in the US election campaign, especially in Michigan and Maine. The latest signal of progress matters because Canada is one of the United States' biggest trading partners and the two economies are closely linked. Any move toward a deal could ease pressure on supply chains, exporters and manufacturers that have been caught in the tariff dispute.

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It also comes as Trump has used tariffs more broadly against US allies, adding to uncertainty in global trade. Carney has been trying to widen Canada's trade options as the dispute with Washington continues. He recently welcomed a European Union offer for Canada to become an associate member, describing his goal as a unique alliance rather than conventional EU membership.

That effort suggests Ottawa is seeking more room to manoeuvre while talks with Washington remain unsettled. What remains unclear is the scope of any possible Canada-US agreement and whether the latest discussions will produce a formal breakthrough in the coming weeks. It is also not known how the talks may be affected by the US midterm vote or by the tariff measures already in place.

For now, both sides are signalling movement, but no deal has been announced.

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