US and Canada Work Toward Steel and Auto Tariff Relief Before Midterm Elections

The United States and Canada are in active negotiations to reduce American tariffs on Canadian steel and automobiles, as both governments work to repair relations strained since trade talks collapsed in August. The duties, imposed under Section 232 of US trade law, stand at up to 50 percent on Canadian steel and 25 percent on autos. Trump has previously announced he would raise tariffs on both steel and auto imports from Canada to 50 percent from January 1, 2027. Commerce Secretary Howard Lutnick and Canadian Trade Minister Dominic LeBlanc have been in regular contact and are at the center of the negotiations, with the Commerce Department administering the Section 232 tariffs rather than the US Trade Representative's office. With President Trump's approval rating at just 32 percent and Republican candidates in border states facing pressure over the trade dispute, the tariffs have become a political liability ahead of the midterms. Canadian Prime Minister Mark Carney said there had been a slight intensification in talks, noting that any progress was because the US is coming closer to Canada's position. US officials are still seeking further Canadian concessions. One Canadian industry source cautioned that any deal would likely be narrow, saying it would happen fast if it happens at all. The earlier trade talks broke down in August over disputes including whether to cut duties on medium- and heavy-duty vehicles. On Friday, Trump signed an order removing 50 percent tariffs on some Canadian agricultural and forestry products, and at a rally on Sunday predicted the trade dispute would be resolved soon.