Trump Says Washington and Ottawa Near Trade Deal as Tariffs Remain

Key Facts

U.S. President Donald Trump said the United States and Canada were “very close” to a potential trade deal after a conversation with Canadian Prime Minister Mark Carney on 1 November 2026, according to the Associated Press. Trump added that the two sides had “the makings of a good deal with Canada,” while Carney described the conversation as based on constructive discussions about the broad outlines of an agreement that would benefit both sides. The indication of progress comes after talks collapsed in late August amid a dispute over tariffs and trade terms. But details of a potential agreement have not been announced, and Carney did not say a deal had been reached. He said teams from both countries would work over the coming weeks to reach an outcome.

According to the Associated Press report on Trump's remarks, the outline under discussion includes building the Keystone XL pipeline, as well as the possibility of eliminating tariffs U.S. farmers pay on Canadian products. The report did not clarify the terms of the proposed exemption or the range of products it might cover, and the final details of the talks remain unsettled. The proposal gives the negotiations two dimensions, one involving energy infrastructure and the other the cost of Canadian products for farmers in the United States. The talks have also covered the possibility of easing U.S. tariffs on Canadian steel and cars, the agency reported. Neither side has announced details of a potential agreement on any of these issues.

The talks are taking place amid reciprocal tariffs that have raised the cost of trade between the two countries. Canada's Finance Department said U.S. tariffs of 50% on C$27.6 billion worth of Canadian goods took effect on 22 August, and that Ottawa decided to impose counter-tariffs of a similar value and rate. In its October report, the Bank of Canada estimated the average U.S. tariff on imports from Canada at 7.5%, compared with 5.0% in its July report. The bank estimated the average Canadian tariff on U.S. imports at 3.9%, up from 1.5% in July. The bank said its economic assumptions hold U.S. tariffs and Canada's retaliatory tariffs at their current levels throughout the projection horizon.

Fertilizers, mentioned in the first report, are particularly important because the United States depends on Canadian supplies of potash, a key ingredient in fertilizer production. The U.S. Geological Survey says Canada accounted for 79% of U.S. potash import sources during 2020–2023. Canada was also the world's largest potash exporter in 2024, according to the agency. But the Associated Press report on Trump's conversation with Carney did not establish that fertilizers are a central focus of the negotiations or that the agreement includes specific terms on them. Trump said the outline under discussion includes the pipeline and the possibility of exempting farmers from tariffs on Canadian products, without announcing implementation details.

The talks became fragile after they stalled in August, when Canada rejected U.S. demands that Carney said threatened Canadian sovereignty, French-language protections and the auto sector. Trump responded at the time by imposing 50% tariffs on a range of Canadian goods, with Canada retaliating, according to the Associated Press; Canada's Finance Department estimated the value of goods covered by the U.S. tariffs at about C$27.6 billion. On the Wednesday before the 1 November conversation, Carney said the two countries were not yet ready to reach a deal before the U.S. midterm elections. The positive conversation came days before the elections, the agency reported. Daniel Béland, a political science professor at McGill University, said recent changes to U.S. tariffs showed the White House recognized the political risks of a trade war, particularly in border states.

The next step is for the teams to work over the coming weeks in pursuit of an outcome in the talks, Carney said. The two sides have not announced a timetable for a final deal or details of its terms, while the Bank of Canada said its projections keep current tariffs in place throughout the forecast horizon. Historian Robert Bothwell warned against reading too much into the improvement in the tone of the talks, according to the Associated Press. That leaves a distinction between Trump's description of the negotiations as nearing a deal and Ottawa's emphasis on the teams' continuing work. The issues on the table, from the pipeline to tariffs on goods, steel and cars, still require details to be announced by both sides.