Canada Says U.S. Moving on Trade Demands as Midterms Near

Canadian Prime Minister Mark Carney stated Monday that trade negotiations with the United States have seen a minor increase in intensity, asserting that any forward movement indicates the U.S. is aligning more closely with Canada's demands.

These remarks come just eight days before the U.S. midterm elections. White House economic advisor Kevin Hassett had previously suggested the two countries were nearing a trade agreement.

"To the extent any progress has been made, it’s because the U.S. is coming closer to our position," Carney said. The office of Canadian Trade Minister Dominic LeBlanc confirmed that Canada is engaged in "constructive dialogue" with Washington.

Carney characterized the discussions as a "slight, slight intensification" but maintained that Canada's negotiating stance has not shifted. He acknowledged uncertainty regarding President Donald Trump's commitment to a new trade agreement, recalling his previous statement that Washington's signature can sometimes be "written in pencil."

In August, Canada rejected terms proposed by Washington, despite appearing to be close to a deal. Carney described the offer as crossing Canadian "red lines." Subsequently, Trump imposed 50% tariffs on approximately $20 billion worth of Canadian goods, which led to retaliatory measures and further trade restrictions from Canada.

Trump announced on Friday that he would lift some 50% tariffs on Canadian goods while simultaneously introducing new tariffs on numerous other products. He told a campaign rally in Michigan two days later that Canada was "willing to give us anything at this moment" and that a deal would be finalized "pretty soon." He also indicated to a Detroit television station that an agreement could be reached before the midterms, though it might extend over several months.

The tariffs imposed by Trump have become a point of discussion in competitive Senate races. Republican candidate Mike Rogers, in a Michigan campaign advertisement, stated that Canada is "not our enemy" and that the "tariff war" needs to end immediately. In Maine, Republican Sen. Susan Collins urged the Trump administration to ease tariffs on Canadian goods essential for farmers and businesses, with Washington announcing exemptions on Friday.

Trump has frequently cited the U.S. trade deficit with Canada. However, energy exports alone largely account for this deficit. The United States imports millions of barrels of Canadian oil daily, often at a discounted rate, and maintains a trade surplus with Canada when energy is excluded from the figures.

Furthermore, Trump desires to relocate automotive production from Canada to the United States, a move that could impact an industry integrated across the border for decades. Trump's trade policies and persistent suggestions of making Canada the 51st U.S. state have prompted Carney to explore alternative markets, with the objective of doubling Canadian exports outside the U.S. within the next ten years.

Carney is scheduled to host European Union leaders later this week in Montreal to foster closer economic and security ties. European Commission President Ursula von der Leyen has proposed granting Canada the status of the EU's first associate member, a designation that remains undefined.