Carney says Trump moving closer to Canada's trade demands as midterms loom

Canadian Prime Minister Mark Carney reported on Monday that trade negotiations with the U.S. administration are showing a modest increase. However, Carney emphasized that the progress is primarily due to the U.S. moving closer to Canada's demands. This development occurs just days before the U.S. midterm elections. Kevin Hassett, White House economic adviser, suggested that the nations are nearing a deal.

Canada's Trade Minister, Dominic LeBlanc, stated that the dialogue remains constructive. Carney acknowledged that while discussions have "slightly intensified," Canada's negotiating stance has not changed. He expressed uncertainty about President Trump's willingness to endorse a new agreement, given his prior warning that Washington's signature on such a deal had been "written in pencil."

In August, Canada rejected the initial U.S. terms, deeming them to conflict with its red lines. Following Canada's rejection, the U.S. imposed a 50% tariff on approximately $20 billion worth of Canadian goods, triggering retaliatory measures and additional trade restrictions. Recently, Trump announced a plan to lift some of the 50% tariffs on Canadian goods while imposing new tariffs on a variety of other products.

He further claimed that Canada was "willing to give us anything at this moment" and suggested a deal would be reached "pretty soon." During a recent appearance in Michigan, Trump stated that Canada was willing to comply with the administration's demands and that an agreement could be finalized before the midterms, though it might take several months.

The U.S. tariffs have become a contentious issue in several Senate races. Republican candidate Mike Rogers, in a Michigan campaign ad, argued that Canada is not Canada's adversary and that the tariff war should end. In Maine, Republican Senator Susan Collins urged the Trump administration to alleviate tariffs on Canadian goods utilized by farmers and other businesses, with Washington announcing exceptions later that week.

Trump has long expressed dissatisfaction with the U.S. trade deficit with Canada, which, aside from energy, Canada typically runs a trade surplus with the United States. Trump also seeks to shift manufacturing from Canada to the United States, posing a challenge for an industry deeply rooted in cross-border operations. As part of his trade war strategy and repeated threats to treat Canada as the 51st U.S. state, Carney is striving to attract new markets.

He aims to double Canadian exports outside the United States over the next decade. On Monday, Carney was set to host European Union leaders in Montreal to explore enhanced economic and security collaboration. European Commission President Ursula von der Leyen had proposed designating Canada as the EU's first associate member, a status that has yet to be defined.