Trade Economics: Ottawa Reports U.S. Shifts Terms Before Midterms

Canadian Prime Minister Mark Carney stated on Monday that recent trade discussions with the White House have intensified slightly.

Carney argued that any movement in the negotiations stems from the United States adjusting its position toward Canadian demands. He noted that Ottawa’s core negotiating stance remains unchanged despite this shift in momentum.

The remarks were made eight days before U.S. midterm elections. White House economic adviser Kevin Hassett suggested the two nations are nearing a final agreement. Trade Minister Dominic LeBlanc’s office characterized the current state of talks as a constructive dialogue.

Carney expressed caution regarding the durability of any potential deal. When asked if President Trump would formally sign an agreement, Carney replied, "I don't know that." This skepticism follows earlier warnings that Washington’s commitments have sometimes been tentative.

The diplomatic friction escalated in August when Canada rejected previous U.S. terms, stating they crossed national red lines. In response, Trump imposed 50 percent tariffs on approximately $20 billion in Canadian goods. This action triggered retaliatory trade restrictions from Ottawa.

Recently, Trump indicated a willingness to lift some of the 50 percent tariffs while imposing new duties on other products. At a campaign rally in Michigan two days later, he described Canada as eager to reach a deal soon. He also told a Detroit television station that an agreement might be settled before the midterms, though the process could still take months.

Tariffs have become a central issue in key Senate races. In Michigan, Republican candidate Mike Rogers campaigned on ending the tariff war, while Maine Senator Susan Collins pressed for exemptions on goods used by farmers. Washington announced such exemptions for certain products on Friday. Economically, energy accounts for the bulk of the U.S. trade deficit with Canada, with the U.S. running a surplus when energy is excluded. Carney plans to meet EU leaders in Montreal this week to explore making Canada the EU’s first associate member, a status intended to diversify exports outside the United States over the next decade.