US and Canada working on deal to ease steel and auto tariffs, sources say

The United States and Canada are working on a deal to ease US tariffs on Canadian steel and cars, Reuters reported on Monday, citing two US and four Canadian sources, as the two governments try to repair relations after trade talks broke down in August.

The talks focus on tariffs under Section 232 of US trade law, including a tariff of up to 50% on Canadian steel and a 25% tariff on autos, with negotiators discussing potential relief from those duties.

One Canadian source said a deal was possible before the November 3 elections; US sources said Washington wanted further concessions. Sources spoke anonymously as the talks are private.

Because the Section 232 tariffs are administered by the Commerce Department, Commerce Secretary Howard Lutnick, rather than the US Trade Representative’s office, is at the centre of the talks, sources on both sides said. Lutnick and Canada’s Dominic LeBlanc have been in regular contact, and LeBlanc’s office said Canada “remains in constructive dialogue” with Washington.

A Canadian industry source cautioned any deal could come quickly but would not necessarily be broad: “If it happens, it’ll happen fast. But my sense is it’ll be a narrowed deal, if it even happens.” The steel and auto talks are separate from Friday’s order removing 50% tariffs on some Canadian agricultural and forestry products.

Reuters also reported Trump has previously announced a rise in steel and auto tariffs to 50% from January 1, 2027, and predicted at a Sunday rally the dispute would be resolved “soon” without specifics. White House National Economic Council director Kevin Hassett told Fox News’ “The Sunday Briefing” negotiations had “picked up” and were “gathering steam”: “I think it’s very close to finally having a deal on that.”

Sources: Reuters, New York Post