Talks Intensify After Midterms, but No Deal Yet
Canada's counter-tariffs on about C$28 billion of U.S. goods remain in place, at rates from 15% to 50%. The White House's October 30 changes to its 50% tariff list took effect, removing 22 product lines and adding 97.
Trade talks have become more intense since Trump and Carney spoke over the weekend, Carney said on November 3. He said the U.S. is 'asking less and offering more' and has dropped objections to Canada's language rules and its other trade deals. Democrats won control of both chambers in the November 3 midterms, but Canada's trade minister said the government's strategy is unchanged.
Why it matters
Tariffs on cars, lumber, food and machinery raise prices for families and factories on both sides of the border.
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Integrating and Enforcing Labor Rights in Trade
Integrating and Enforcing Labor Rights in Trade
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Curated perspectives — historical figures and your fellow readers.
Fictional AI pastiche — not real quote.
"Tariffs are a tax on your own people dressed up as patriotism. These men are strangling the very commerce that made their fortunes possible—steel, rails, and transport built this continent as one market, not twenty fractured fiefdoms nursing wounded pride."
Fictional AI pastiche — not real quote.
"I warned them in '32 that Smoot-Hawley would strangle commerce, yet here we are repeating the same folly with different flags. The mathematics of reciprocal destruction remain unchanged: when neighbors tax each other into poverty, neither collects revenue worth having."
The agency responsible for developing and coordinating U.S. international trade policy, including tariff implementation and USMCA negotiations.
Canada's ministry responsible for economic and fiscal policy, including the tariff remission orders that determine which U.S. goods receive relief from retaliatory duties.
Canadian business jet manufacturer based in Montreal.
January 2025 November 2026
Canada's trade minister said it is 'not particularly constructive' for Canadians to interpret a foreign election. He said talks are conducted with Trump and his cabinet, who remain in office.
Rep. Jamie Raskin, the ranking Democrat on the House judiciary committee, told CBC News that Congress controls tariffs under the Constitution and would 'put an end to these tariffs.'
Carney said more intense negotiations were underway and the U.S. had dropped objections to Canada's language rules and its other trade deals. He said the two sides were 'not quite there.'
Democrats won both the House and Senate in the midterm elections, according to CBC News. The result raised questions in Canada about whether Congress could challenge Trump's tariffs.
POLITICO reported that U.S. Trade Representative Jamieson Greer was privately urging Trump to return to negotiations. CTV News reported that Commerce Secretary Howard Lutnick led a separate push focused on steel, aluminum, lumber and auto tariffs.
Carney said the call was constructive and negotiators would work toward an agreement. Trump said both sides had the 'concept' of a mutually beneficial deal.
The White House's changes to the 50% tariff list took effect. Twenty-two product lines left the list and 97 were added.
A Canadian government official said there has been "limited progress" on easing U.S. steel and auto tariffs. Carney said Canada will pursue a deal if one presents itself, but "we're not at that position right now."
Commerce Secretary Howard Lutnick and Canadian Trade Minister Dominic LeBlanc have spoken regularly since October 21, according to POLITICO's sources. A senior Canadian official said talks remain informal.
Canada's chief trade negotiator, Janice Charette, said "pens are down, and the doors are open," but talks were not at the negotiating table. Carney said Canada's position had not changed since August.
Reuters reported that both governments are working on a deal to ease Section 232 tariffs on Canadian steel and autos. A Canadian source said a deal was possible before the November 3 elections, while U.S. sources said Washington wants more Canadian concessions.
The White House said it would remove 22 product lines, including plywood, some paper, refrigeration equipment and farm machinery, from the 50% tariff list on October 30. It added 97 lines in their place, among them valves, carpets, paints, shampoos and canoes. The duties apply to covered goods even when they qualify under the U.S.-Mexico-Canada Agreement.
Canada's chief trade negotiator, Janice Charette, said lines of communication with Washington remain open but there is no clear path back to formal talks. She said the USMCA review process is still ahead.
Trump backed away from his threat to block Bombardier jets from the U.S. market after Kansas lawmakers, including Republican Senator Roger Marshall, objected. The company employs 1,500 people in Wichita.
The U.S. began blocking imports of some Canadian motorcycles, dairy products and alcohol under Section 338. The bans were announced September 8 in response to Canada's counter-tariffs.
U.S. Trade Representative Jamieson Greer told CNBC Washington was comfortable maintaining the standoff as new import bans neared. He also said 50% tariffs on Canadian autos, parts and steel were still set for January.
Canada removed fresh fish and lobster from its counter-tariff list after pushback from its seafood industry. The final list covers nearly C$28 billion ($20 billion) of U.S. goods, from steel to furniture to cotton T-shirts.
Bombardier said it supports tens of thousands of American jobs and called the U.S. aerospace industry a 'clear winner on trade and exports.' The statement came a day after Trump threatened to ban its jets from the U.S. market.
The Canadian government said Gulfstream aircraft 'are and can be freely sold and operated in Canada,' countering Trump's claim that Ottawa had blocked the U.S. planemaker.
Eight of Canada's 10 provinces restrict or prohibit U.S. alcohol sales. American spirits exports to Canada fell more than 70% year over year, according to the Distilled Spirits Council of the United States.
President Trump said he would block Bombardier aircraft from selling in the U.S. unless built there, renamed Lake Ontario 'Lake America,' and threatened the Canadian dollar, according to Global News. The threats came hours before Canada's counter-tariffs took effect.
President Trump said he would raise tariffs on all Canadian cars, trucks, and auto parts to 50% starting January 1, 2027, escalating the trade fight after talks collapsed.
Canada's temporary relief on retaliatory tariffs for U.S. steel used in manufacturing, food packaging, and agriculture expires. Auto and aerospace exemptions continue until June 30.
25% tariffs on steel derivative products from all countries take effect, covering $10 billion in imports.
Canada extends steel tariff remission to January 31 for general manufacturing; June 30 for automotive and aerospace sectors.
Carney government unveils measures to protect domestic steel: new 25% tariffs on steel derivatives globally, reduced quotas for imports.
Trump announces cancellation of all trade negotiations with Canada after Ontario publishes advertisement criticizing tariff policy.
Canada eliminates retaliatory tariffs on most U.S. goods, keeping only steel, aluminum, and auto tariffs in place.
Trade deal deadline expires without agreement. U.S. raises Canadian tariffs from 25% to 35%; adds 50% copper tariff.
U.S. increases steel and aluminum tariffs from 25% to 50% for all countries except the UK.
U.S. imposes 25% tariffs on automobiles. Non-USMCA-compliant vehicles and parts subject to duties.
Mark Carney sworn in as Canada's 24th Prime Minister, replacing Justin Trudeau. Confirms he will maintain retaliatory tariff stance.
Canada imposes 25% retaliatory tariffs on $29.8 billion of U.S. imports: $12.6B steel, $3B aluminum, $14.2B other goods.
U.S. imposes 25% tariffs on steel and aluminum from all countries under Section 232, including Canada. No USMCA exemption for these products.
U.S. exempts USMCA-compliant Canadian goods from tariffs, covering approximately 90% of Canadian exports. Canada delays Phase 2 retaliation.
U.S. tariffs on Canadian goods become effective. Canada imposes 25% retaliatory tariffs on $30 billion worth of Phase 1 U.S. goods.
Trump pauses tariff implementation until March 4. Canada announces matching pause on $30 billion retaliatory tariffs.
Trump announces 25% tariffs on most Canadian goods and 10% on energy, citing border security concerns under IEEPA. Implementation set for February 4.
New administration releases trade policy memorandum directing studies on tariff implementation by April 1.
Discussed by: Center for Strategic and International Studies, Baker Institute, and trade lawyers anticipating July 2026 review
All three countries agree to renew the USMCA for another 16 years, but only after Canada and Mexico accept new terms. Possible concessions include stricter rules of origin for automobiles, concessions on dairy and lumber market access, alignment with U.S. trade restrictions on China, and formal side letters institutionalizing some tariff levels. Steel and aluminum tariffs may remain in place even as the broader agreement continues.
Discussed by: Oxford Economics analysts and Global News reporting on review process risks
The three countries fail to agree on renewal but none withdraws. Under USMCA Article 34.7, this triggers annual reviews where the agreement remains in force but its future stays uncertain. This creates persistent policy uncertainty, discouraging long-term investment in cross-border manufacturing while existing supply chains continue functioning. Tariffs on non-compliant goods remain.
Discussed by: U.S. Trade Representative Greer has floated bilateral frameworks; AmCham Mexico considers this suboptimal but possible
The U.S. withdraws from USMCA and negotiates separate bilateral agreements with Canada and Mexico. This would eliminate the integrated North American supply chain framework and create different rules for each border. Critics warn this would be 'highly complex' and economically damaging, but it would give the U.S. more leverage in separate negotiations.
Discussed by: Prime Minister Carney's Davos remarks; trade diversification strategy announcements
Unable to secure tariff-free access to the U.S. market, Canada accelerates trade deals with the European Union, Asia-Pacific nations, and others. Carney has already announced plans for 12 new trade agreements. The U.S.-Canada relationship stabilizes at a higher-tariff equilibrium, with Canadian manufacturers shifting focus away from American customers. The USMCA continues but with diminished practical importance.
Discussed by: Trump's repeated threats; WTOP and BBC coverage of the January 1, 2027 deadline
Trump has promised to raise tariffs on Canadian vehicles, auto parts and steel from 25% to 50% starting January 1, 2027, unless Canada 'falls in line.' Auto industry analysts warn the increase would hit deeply integrated North American supply chains, where parts cross the border multiple times during assembly.
Discussed by: President Trump's Sept. 7 threat; Forbes and Globe and Mail coverage
Trump said he would block Bombardier jets unless they are built in the U.S. A ban would hurt Bombardier, since more than half of its 2025 revenue came from the U.S. The company employs 3,500 people in the U.S., which could make a ban politically awkward.
Discussed by: Maine Senator Susan Collins and Republican lawmakers from Kansas
The White House removed some Canadian paper, machinery and refrigeration products from its 50% tariff list after Collins and Kansas lawmakers said the duties hurt local businesses. More exemptions could follow before the November 3 midterm elections.
Discussed by: A Canadian government source briefed on the talks, as reported by Reuters
The November 3 midterms passed without a steel and auto tariff deal. Carney said on November 3 that talks had intensified, but autos remained a sticking point.
Discussed by: Carney, who said he will meet Trump at APEC later in November
Carney said he will meet Trump at the APEC summit in China later in November. Autos remain the hardest issue, with the U.S. having offered before the August collapse to cut car tariffs from 25% to 15%.
Discussed by: Rep. Jamie Raskin, ranking Democrat on the House judiciary committee
After Democrats won both chambers, Raskin said Congress controls tariffs under the Constitution and would 'put an end to these tariffs.' A bill would still need presidential signature or a veto override.
3 moments from history that rhyme with this story — and how they unfolded.
Despite warnings from over 1,000 economists and opposition from executives like Henry Ford and J.P. Morgan's Thomas Lamont, President Hoover signed the Smoot-Hawley Tariff, raising average tariffs on dutiable imports from 40% to 47%. As the Depression caused deflation, the effective rate reached nearly 60% by 1932. Canada responded by imposing tariffs covering 30% of U.S. exports within months.
Over two dozen countries enacted retaliatory tariffs. U.S. imports fell 66% from $4.4 billion to $1.5 billion between 1929 and 1933.
Smoot-Hawley became synonymous with protectionist overreach, leading to the 1934 Reciprocal Trade Agreements Act and decades of bipartisan consensus against high tariffs. Senators Smoot and Hawley both lost their seats in 1932.
Today's 16.9% effective U.S. tariff rate is the highest since 1932, the peak of Smoot-Hawley's impact. Canada was the first country to retaliate against Smoot-Hawley, just as it has responded dollar-for-dollar to current U.S. tariffs.
In response to U.S. protectionism and the Depression, Britain and its dominions including Canada met in Ottawa to create a system of preferential tariffs within the British Empire. Britain abandoned its longstanding free trade policy, and Canada strengthened ties with British markets while reducing dependence on American trade.
Britain's imports from the Empire increased from under 30% to over 40%. Trade patterns shifted dramatically away from the United States.
Imperial Preference lasted until the 1970s and demonstrated how protectionism can accelerate the formation of competing trade blocs rather than simply reducing overall trade.
Carney's announcement of 12 new trade deals at Davos echoes Canada's 1932 pivot toward alternative trading partners. Then as now, U.S. tariffs prompted Canada to seek closer ties elsewhere.
In his first term, Trump imposed 25% tariffs on steel and 10% on aluminum under Section 232, citing national security. After initial protests, Canada and Mexico were granted exemptions as part of USMCA negotiations. The EU, Japan, and other allies negotiated quota arrangements.
The U.S. steel industry added nearly 5,000 jobs, but downstream manufacturers faced higher input costs. Analysts calculated $270,000 in added industry profits per steel job saved.
The tariffs remained in place through the Biden administration. They established the precedent for using Section 232 authority broadly, paving the way for the current expansion.
The 2025 tariff escalation explicitly revokes the exemptions negotiated in 2018. Canada went from exempted ally to facing 50% steel tariffs in seven years, demonstrating how bilateral trade arrangements can unravel.