Canadian Prime Minister Mark Carney gave a positive assessment after a conversation with U.S. President Donald Trump, as Washington and Ottawa discuss easing tariffs. A Canadian insider said an agreement could be reached before the U.S. congressional elections on Nov. 3, though the U.S. government is pressing Canada for further concessions.
Talks are being led on the U.S. side by trade minister Howard Lutnick, who is in regular contact with Canadian minister Dominic LeBlanc, according to the report. LeBlanc's ministry said Canada is in a constructive dialogue with the U.S. and is ready for a mutually beneficial trade relationship.
The Wall Street Journal reported that the U.S. plans to lift 50% tariffs on some Canadian agricultural and forestry products. The move is seen as support for Republican politicians in northern states before the midterms, and tariff reductions could be offset by higher duties on other Canadian goods. The report said an order could be issued the same day. A White House representative told the newspaper that any tariff announcements would come directly from the administration and that preliminary reports were speculation.
Shortly after the report, Senator Susan Collins said nine product categories would be exempt from U.S. tariffs, including blueberries, potatoes and apples. Collins, a Republican, is seeking a sixth term in Maine. The economies of northern U.S. states such as Michigan and Maine have long been closely linked to Canada, and Republicans likely need to win those states to defend their Senate majority. Trump said on Friday that Canada was working on a trade deal with the U.S., but the two countries have been at a standstill since talks failed in August.
Separately, China and the U.S. agreed to reduce tariffs on non-sensitive goods worth $30 billion, China's Xinhua news agency reported. U.S. Trade Representative Jamieson Greer said details could be published on Monday and mentioned U.S. agricultural products and medical devices as well as Chinese consumer goods. The two sides also extended a truce in their trade conflict that includes provisional tariff cuts and rare earth exports; the duration was not disclosed. U.S. Treasury Secretary Scott Bessent had spoken of a two-month extension, while media reports said China had sought a year or longer.
The U.S. and China also plan an AI dialogue and an emergency channel for AI incidents, with the next AI dialogue scheduled for November. They agreed that Iran should not develop nuclear weapons and that no state or organization should charge transit fees for international waterways. The leaders expressed an intention to attend APEC in Shenzhen and the G20 in Florida in November.
In a speech to the European Parliament, Carney said Canada is open to the idea of a special EU membership. He said Canada and Europe are both strong and stronger together. Carney said Canada does not want to become a third world power and is seeking greater resilience, stronger democracy and international law. He was speaking a day after the EU announced an associated membership for Canada and after Trump threatened the EU with tariffs over closer ties with Canada.
The German auto industry is concerned about the U.S.-Canada trade dispute. Trump has announced that tariffs on Canadian cars, trucks, auto parts and steel will rise to 50% in early 2027, and the VDA said many German suppliers have production sites in Canada and supply the U.S. from there. Canada has imposed retaliatory tariffs on $20 billion worth of U.S. goods. U.S. tourism bodies are meanwhile trying to attract Canadian visitors, with New York running a campaign and Las Vegas hotels offering parity for the Canadian dollar. Canadian residents spent about $2.4 billion less on U.S. travel in 2025 than in the previous year, according to Statistics Canada.
Sources: Handelsblatt.