Sources Say White House Wants Fresh Momentum on Canada Trade Deal, but Trump’s Tariffs Remain

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After months of stalled negotiations, retaliatory measures and increasingly strained rhetoric, Washington is again signaling that it wants movement on a trade agreement with Canada. Government and industry sources close to the discussions say the White House has shown a stronger appetite for a deal, while senior U.S. officials are publicly describing negotiations as increasingly active.

The change in tone is significant, but it should not be mistaken for a settlement. President Donald Trump’s tariffs on Canadian products remain largely intact, and his administration is simultaneously removing duties from some goods while adding them to others. For Canada, the result is an unusual moment: the negotiating channel appears to be reopening just as businesses on both sides of the border are dealing with the consequences of a trade fight that is far from over.

Talks Have Restarted With More Energy

The clearest sign of a shift came from White House National Economic Council Director Kevin Hassett, who said Canada-U.S. negotiations had “picked up” and were “gathering steam.” Hassett said Commerce Secretary Howard Lutnick had been speaking with Canadian counterparts throughout the previous week and suggested the countries were very close to reaching an agreement. Separate reporting from sources close to the discussions pointed in the same direction, describing considerable appetite inside the White House to get an agreement moving again. Canadian Trade Minister Dominic LeBlanc’s office, meanwhile, said Ottawa remained in constructive dialogue with Washington.

Trump reinforced that sense of movement during a Sunday campaign stop in Port Huron, Michigan, directly across the border from Ontario. He predicted the dispute would be settled “pretty soon,” although he offered no negotiating terms or timetable. That distinction matters. U.S. officials have also indicated that Washington still believes Canada needs to offer more concessions, and neither government has released final language, a signing date or an agreed package. After previous negotiations came close to producing a deal before collapsing in August, optimistic language alone is unlikely to reassure businesses. This time, companies will be looking for signed terms rather than another round of promising signals.

Tariffs Are Being Reworked, Not Rolled Back

The latest White House tariff changes illustrate why renewed negotiations have not yet translated into broad economic relief. On October 23, Trump signed a proclamation modifying the list of Canadian goods facing additional 50 per cent duties under Section 338 of the Tariff Act of 1930. Beginning October 30, products including certain plywood, paper and packaging materials, machinery and refrigeration equipment will come off the list. Fresh and dried seaweed also received relief, changes that could particularly benefit businesses in Maine that depend on Canadian supplies.

But Washington did not simply eliminate those tariffs. The administration simultaneously moved other Canadian products onto the 50 per cent list, including categories covering certain valves, carpets and waste products, with additional reporting identifying goods such as paints and other manufactured products. The White House explicitly says these Section 338 duties can apply in addition to separate Section 232 tariffs. Ottawa previously estimated that the August package targeted C$27.6 billion worth of Canadian goods and responded with tariffs on an equivalent value of American imports. For exporters, that means the October adjustments are better understood as a reshuffling of pressure rather than the dismantling of the tariff regime. Some businesses receive relief while others suddenly find themselves on the wrong side of the border tax.

The U.S. Midterms Are Changing the Political Math

Trade negotiations are also unfolding just days before the November 3 U.S. midterm elections, making domestic politics difficult to separate from tariff policy. Republican Sen. Susan Collins of Maine pushed the administration for exemptions covering products used by farmers and businesses in her state. Maine growers, for example, rely on specialized Canadian packaging and equipment that can be expensive or difficult to replace domestically. The White House subsequently removed several of those products from the tariff list, giving Collins a tangible piece of tariff relief to highlight during a competitive reelection campaign.

Michigan presents another warning sign for Republicans. Senate candidate Mike Rogers has publicly called for an end to the broader Canada tariff fight and has specifically expressed concern about its effect on the automotive industry. Trump chose Port Huron for his latest promise that an agreement was approaching, speaking in a border region deeply connected to Canadian trade and Detroit manufacturing. National attitudes add to the pressure. An AP-NORC poll conducted in late September found 65 per cent of U.S. adults blamed Trump’s policies more than outside forces for persistently high prices. Whatever the administration’s long-term trade objectives, the immediate electoral incentive to show progress with Canada has become considerably stronger.

Ottawa Is Open to a Deal, but Its Red Lines Remain

Canada is not rejecting negotiations. Prime Minister Mark Carney has said his government is prepared to sit down immediately if Washington is willing to negotiate in good faith, and LeBlanc has repeatedly described Canada as willing to pursue a mutually beneficial relationship. That openness, however, comes with a clear warning against accepting an agreement simply to satisfy a political deadline. Carney has even said Canada is prepared to wait months—or potentially for a future U.S. administration—if that is what is required to secure acceptable terms.

That position reflects what happened when negotiations collapsed in August. Ottawa said it wanted to preserve tariff-free U.S. access for the vast majority of Canadian businesses, substantially reduce tariffs on strategic industries and protect Canadian flexibility, independence and sovereignty. Carney said last-minute U.S. demands did not meet those objectives and suspended negotiations rather than sign. Canada then matched new American tariffs with retaliatory measures. The renewed discussions therefore begin with baggage from the failed round: Washington believes Ottawa has more concessions to make, while Canada wants evidence that any new compromise will deliver lasting market access rather than another temporary pause in tariff escalation. The willingness to negotiate is genuine, but so is Ottawa’s willingness to walk away again.

Autos and Metals Still Sit at the Centre of the Dispute

The most consequential tariffs extend well beyond the products affected by the latest White House exemptions. Canadian government guidance shows the United States continues to maintain major Section 232 duties on strategically important sectors. Steel, aluminum and copper products can face tariffs ranging from 15 to 50 per cent depending on their classification and content. Autos and trucks face a 25 per cent tariff, although the U.S. content of CUSMA-compliant vehicles receives an exemption, while compliant auto parts currently have broader protection. Softwood lumber is also subject to a 10 per cent Section 232 tariff.

Those measures matter because North American manufacturing was built around components crossing the border repeatedly before a finished product reaches a customer. Carney said in October that Canadian auto exports to the United States had fallen by more than 10 per cent, while U.S. auto exports to Canada were down more than 20 per cent. The steel industry has experienced an even sharper adjustment: Reuters reported Canadian steel exports to the United States had fallen about 60 per cent after higher U.S. tariffs took effect. Canadian producers have responded by seeking domestic customers in infrastructure, energy, mining and defence. A tariff deal that leaves autos, metals and lumber largely untouched would therefore offer only partial relief to the industries most exposed to the dispute.

Businesses Are Already Paying for the Uncertainty

The cost of the trade fight is increasingly visible in business decisions rather than only customs data. The Bank of Canada’s October Business Outlook Survey found that companies surveyed after the August breakdown in negotiations reported weaker sentiment and lower expectations for export sales. Trade tensions were again weighing more heavily on investment plans, while firms reported higher costs and greater pressure on selling prices. Roughly half of surveyed businesses said they planned to pass at least some cost increases associated with tariffs and other external pressures on to customers.

Companies are also changing how they operate. The Bank found businesses modifying supply chains, looking for alternative suppliers, investing in automation, exploring new export markets and, in some cases, reducing capacity or shifting investment outside Canada. The Parliamentary Budget Officer offered a broader measure of the risk on October 20. It estimated that recent trade measures had lifted the effective U.S. tariff rate on Canadian imports from 5.3 per cent to 7.7 per cent. If the broader tariff environment persists, the PBO estimates Canada’s real GDP could be 1.4 per cent lower after five years than under a pre-tariff baseline, with employment losses potentially reaching 185,000 at their peak. For businesses, certainty may now be nearly as valuable as the tariff reductions themselves.

A Near-Term Deal Would Not End the Bigger CUSMA Fight

Even a successful bilateral tariff agreement would leave a larger North American trade question unresolved. On July 1, the United States declined to renew the U.S.-Mexico-Canada Agreement in its current form during the pact’s scheduled joint review. That decision did not terminate CUSMA. The agreement remains legally in force, and Canada says it can continue operating until 2036 while the three countries keep negotiating over its future. Renewal can still occur if the parties eventually reach consensus.

That distinction gives the current Canada-U.S. talks much greater significance. Steel, aluminum, autos and other sectoral disputes overlap with broader disagreements about how North American trade should function in the next decade. Ottawa wants predictable access to its largest export market; Washington wants changes it argues will strengthen American manufacturing and address perceived trade imbalances. The two countries could therefore reach a tariff arrangement before resolving the future of CUSMA itself. For Canadian companies, that would be welcome breathing room, but not the return to the commercial certainty that existed before the trade conflict intensified. The strongest evidence of genuine momentum will not be another declaration that a deal is close. It will be an agreement that survives the political pressure surrounding it—and gives businesses confidence that the rules will still be there when their next investment comes due.

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