Carney: U.S. Yielding on Trade Terms Before Midterms

Canadian Prime Minister Mark Carney stated Monday that recent trade negotiations with the United States have intensified, but he attributed the momentum to Washington moving closer to Ottawa's demands. The remarks were made eight days before the U.S. midterm elections, a period when White House economic adviser Kevin Hassett suggested the two nations were close to finalizing a deal.

Carney described the recent diplomatic activity as a "slight, slight intensification" of discussions. He emphasized that Canada's core negotiating position has not changed. Trade Minister Dominic LeBlanc's office characterized the ongoing talks as a "constructive dialogue." Carney specifically noted that any progress made so far stems from the U.S. aligning more closely with Canadian interests.

The current standoff began in August when Canada rejected a U.S. proposal that Carney said crossed Canadian "red lines." In response, President Donald Trump imposed 50% tariffs on approximately $20 billion in Canadian goods. These measures triggered retaliation and additional trade restrictions from both sides. On Friday, Trump announced he would lift some of these 50% tariffs while imposing new duties on dozens of other products.

Trump has signaled that a resolution is imminent. Speaking at a campaign rally in Michigan two days after his tariff announcement, he claimed Canada is "willing to give us anything at this moment" and predicted a settlement would occur "pretty soon." In an interview with a Detroit television station, he indicated an agreement could be reached before the midterms, though he acknowledged the process might take months. Carney admitted uncertainty about whether Trump would stick to a new deal, replying "I don't know that" when asked if the president would "sign in pen" rather than "pencil."

The trade dispute has become a factor in several competitive Senate races. In Michigan, Republican candidate Mike Rogers argued in a campaign ad that Canada is "not our enemy" and called for an end to the tariff war. In Maine, Republican Senator Susan Collins urged the administration to ease tariffs on Canadian goods used by farmers and businesses. The White House responded to these pressures by announcing exemptions for those goods on Friday.

Economic data shows the U.S. trade deficit with Canada is driven primarily by energy imports. The United States buys millions of barrels of Canadian oil daily, often at a discount. When energy is excluded from the calculation, the U.S. runs a trade surplus with Canada. Trump also seeks to shift auto production from Canada to the U.S., a move that threatens an industry with deeply integrated cross-border operations.

As the trade war continues, Carney is actively seeking to diversify Canada's economic partnerships. He is hosting European Union leaders in Montreal this week to discuss 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 has not yet been formally defined.