Carney and Trump point to a deal on Canadian tariffs, with Keystone XL back on the table

Trump says the two sides are very close, and that Canada will pay for reviving the pipeline.

Canada and the United States are working towards a deal that would ease American tariffs on Canadian steel and autos, the first settlement of the dispute by sector. Prime Minister Mark Carney said Sunday that a phone call with President Donald Trump on Saturday was a "good conversation" and that their teams would work to agree terms "in the coming weeks". Trump said the sides are "very close to having a deal".

We have been here before. On July 20 Washington announced 50 per cent tariffs on Canadian goods, covering about 5 per cent of exports with no exemption under the USMCA trade pact, citing treatment of American alcohol, cars and dairy. On August 18 Trump said he had paused them and that a deal was reached subject to paperwork. By August 24 Carney said momentum had reversed and that Canada could not accept what was offered nor give what was asked. Trump then posted that Canada had been ripping the US off for years, and on September 8 ordered Canadian-origin products removed from a federal procurement schedule.

The latest signals point to something narrower than a full settlement. The Wall Street Journal reported on October 23 that Trump is expected to remove some tariffs, while Canadian officials warn against expecting a return to tariff-free trade. Steel and aluminum have faced 50 per cent duties since June 2025.

Canada has reason to want relief. Ottawa has put together a C$9bn support package for steel and autos, GDP was flat in both July and August, and the Bank of Canada raised its key rate to 2.5 per cent from 2.25 per cent on October 28, its first increase since July 2023. Tightening into a stalling economy leaves little room for a prolonged standoff.

Washington has less urgency. On September 25 the US trade representative said Trump was comfortable with where things stand. The USMCA is also unsettled: the US declined to renew it on July 1, which puts it into annual reviews that can run through 2036.

Trump added that talks would cover reviving the Keystone XL oil pipeline from Alberta to Nebraska, halted under both Obama and Biden. Canada is "going to pay for it", he said, and the US will "give them the route". Carney has not said Canada would.