Trump’s Top Economic Adviser Blames Alberta Referendum for Delays in Canada-U.S. Trade Deal

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Political uncertainty in Alberta has unexpectedly become part of Washington’s explanation for why a new Canada-U.S. trade agreement has taken so long to materialize. Kevin Hassett, director of the White House National Economic Council, says negotiations are now gaining momentum, but argues that Canadian political events — including Alberta’s recent vote on whether to begin a process toward a future separation referendum — complicated earlier discussions.

The comments arrive at a particularly sensitive moment. Ottawa and Washington have spent months trading tariffs, negotiating exemptions and disagreeing publicly about why talks broke down in August. Now both governments are again signaling movement. Yet Hassett’s explanation adds a new layer to the dispute, connecting a domestic Canadian unity debate to negotiations involving hundreds of billions of dollars in cross-border commerce.

Hassett Makes Alberta Part of Washington’s Explanation

Hassett delivered one of the Trump administration’s most optimistic assessments of the negotiations on October 25, saying the United States and Canada were “very close to finally having a deal.” Appearing on Fox News’ The Sunday Briefing, he said discussions had picked up and were gathering momentum, with Commerce Secretary Howard Lutnick speaking with Canadian counterparts throughout the previous week. Hassett holds one of the White House’s most senior economic-policy positions as director of the National Economic Council, giving his assessment considerably more weight than an ordinary political prediction.

His explanation for the earlier slowdown was more striking. Hassett cited Canadian political events, including the Alberta vote concerning a possible future separation referendum, as having made negotiations extremely difficult. The statement does not mean Alberta was formally participating in federal trade negotiations, nor has evidence emerged showing the referendum legally prevented Canada from negotiating. Instead, Hassett appeared to be arguing that uncertainty over Canada’s political direction made Washington reluctant or unable to conclude a major agreement. That remains the U.S. administration’s characterization rather than an established explanation accepted by both governments.

The Alberta Vote Was Not a Direct Independence Referendum

Hassett’s description risks making the Alberta vote sound more final than it actually was. Albertans went to the polls on October 19 to answer 10 referendum questions. The most consequential, Question 10, asked voters to choose between Alberta remaining a Canadian province and having the provincial government begin the legal process required to hold a future binding referendum on separation. Elections Alberta explicitly classified that question itself as non-binding. In other words, a victory for the second option would not have made Alberta independent.

The result was nevertheless decisive. Unofficial returns showed roughly three-quarters of voters choosing to remain in Canada, compared with about one-quarter supporting the beginning of a process toward another, binding separation vote. More than two million ballots were counted on Question 10, giving the remain side an advantage of roughly one million votes. Elections Alberta scheduled the official declaration of results for October 29. The distinction matters when evaluating Hassett’s comments: Washington was dealing with political uncertainty surrounding a possible future constitutional process, not an imminent breakup of Canada decided by voters on October 19.

Ottawa and Washington Disagree on Why the Talks Broke Down

The referendum explanation also does not tell the entire story of the negotiating delay. Canada had already suspended intensive trade negotiations on August 21, almost two months before Albertans voted. Prime Minister Mark Carney said at the time that negotiations had made progress but that last-minute changes to the American proposal were unfair and economically unacceptable. He instructed Canadian negotiators to return to Ottawa rather than accept what his government considered a bad agreement. The United States was preparing to apply 50% tariffs to roughly $28 billion in Canadian goods at the same time.

Washington tells the episode differently. An October White House account says Canada walked away from what it characterized as a near-final agreement before imposing retaliatory tariffs on U.S. exports. Those competing explanations are important because they show that the collapse cannot be attributed solely to Alberta’s political debate. The referendum may have contributed to the uncertainty perceived by U.S. officials, as Hassett argues, but concrete disputes over tariffs, market access, sectoral protections and the proposed terms of an agreement had already pushed the negotiations into crisis weeks before Alberta voted.

Alberta’s Energy Weight Explains Why Washington Pays Attention

Even without a constitutional crisis, Alberta is too economically important for American policymakers to ignore. The province accounted for 83.8% of Canadian crude oil and equivalent production in 2025, according to the Canada Energy Regulator. Alberta also exported approximately $151.5 billion worth of goods to the United States during the year, making the U.S. by far its largest international market. China, Alberta’s second-largest export destination, received less than $10 billion, illustrating just how deeply the province remains tied to American demand.

The relationship works in the other direction as well. Canada supplied 63.4% of all crude oil imported by the United States in 2025 and close to 100% of U.S. natural-gas imports. Canadian crude shipments to the American market averaged roughly 3.9 million barrels per day. Because Alberta dominates Canadian oil production, any serious uncertainty over the province’s constitutional or economic future naturally attracts attention in Washington, particularly in states whose refineries depend heavily on Canadian heavy crude. That makes Alberta strategically relevant to trade negotiations even though energy was not what triggered the October referendum.

U.S. Tariff Carveouts Show How Domestic Politics Are Shaping Trade Policy

Signs of movement have emerged even without a comprehensive deal. On October 23, Trump modified the scope of the 50% Section 338 tariffs imposed on certain Canadian products. Plywood, some paper products, packing materials, refrigeration equipment and certain machinery were among the products removed from the tariff list, while other products were added. The changes are scheduled to take effect October 30. Importantly, the White House says the targeted Section 338 duties can apply even to goods that otherwise satisfy the rules of the existing U.S.-Mexico-Canada Agreement.

The exemptions also demonstrate how local American politics are influencing the dispute. Republican Maine Sen. Susan Collins said she secured relief for nine product categories after discussing the economic damage with senior Trump administration officials. Maine blueberry, potato, apple and seaweed producers rely on Canadian packaging, equipment and other inputs that can be difficult or expensive to replace domestically. Hassett separately highlighted the administration’s attention to Maine and Alaska industries. For Canadian exporters, the episode offers both encouragement and warning: individual tariffs can be changed quickly, but those decisions can be driven as much by American domestic political pressure as by negotiations with Ottawa.

The Dispute Is Bigger Than a Single Bilateral Agreement

Another complication is that the current negotiations are unfolding alongside the formal review of CUSMA, known in the United States as the USMCA. The three-country agreement did not expire when its first mandatory review occurred on July 1, 2026. Canada and Mexico supported extending the framework, but the United States declined to renew it in its current form. U.S. Trade Representative Jamieson Greer said Washington instead wanted outstanding concerns addressed before agreeing to an extension.

Under the agreement’s own rules, CUSMA remains in force. Because all three governments did not agree to another 16-year extension at the 2026 review, the agreement moves into annual reviews. If the parties eventually agree to an extension, another 16-year period can be triggered. Otherwise, the existing agreement can continue through 2036 unless a country separately invokes its withdrawal rights. That means any near-term Canada-U.S. arrangement must be understood within a much larger negotiation over the future architecture of North American trade. A bilateral tariff compromise would therefore not necessarily settle every disagreement surrounding CUSMA.

Businesses Are Paying for the Uncertainty Before a Deal Is Signed

For companies caught between the two governments, the argument over who delayed the negotiations can seem secondary to the cost of not knowing what comes next. The Bank of Canada’s third-quarter Business Outlook Survey found that responses collected after the August breakdown showed weaker business sentiment and lower expectations for export sales. Trade uncertainty was again weighing more heavily on investment decisions, while companies reported greater pressure on costs and prices. Roughly half of surveyed firms experiencing elevated costs expected to pass at least some increases on to customers.

The underlying trading relationship nevertheless remains enormous and capable of rebounding quickly. Statistics Canada reported that merchandise exports to the United States jumped 8.1% in August, while imports from the U.S. declined 2.5%. Canada’s monthly merchandise trade surplus with the United States consequently widened from $6.1 billion to $11.2 billion. Those figures illustrate the unusual nature of the dispute: political relations can deteriorate rapidly while factories, pipelines, retailers and transportation networks remain tightly interconnected. For businesses deciding where to place their next factory, supplier contract or investment, however, uncertainty can become a cost of its own long before a tariff actually appears on an invoice.

The Political Clock Is Now Pushing Both Sides Toward a Decision

The latest optimism is arriving immediately before the November 3 U.S. midterm elections, giving Washington another reason to demonstrate progress. Trump travelled to Port Huron, Michigan, on October 25 and predicted that the trade dispute with Canada would be settled relatively soon. In a separate interview the same day, he suggested an agreement could take a couple of months but also left open the possibility of movement before the election. Michigan is particularly sensitive to the issue because its auto industry depends on supply chains that repeatedly cross the Canadian border.

Ottawa is sounding more cautious. Canadian officials say the government remains prepared to negotiate constructively and in good faith, while Carney has repeatedly emphasized that Canada will accept an agreement only if it serves Canadian interests. No completed text, final terms or signing date had been publicly announced when Hassett declared negotiations close to a breakthrough. That makes the coming period important for separating political messaging from an actual settlement. Alberta’s referendum may have removed one source of uncertainty, but tariffs, automobiles, agriculture, strategic industries and the long-term future of CUSMA remain far larger obstacles to a durable Canada-U.S. agreement.

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