A long-anticipated U.S.–Canada trade agreement might go forward later this month at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.
The Globe and Mail reported that the prospective deal would see Canada accept export quotas on steel in exchange for reduced U.S. tariffs. The talks, according to sources familiar with the matter, do not include critical minerals.
The report follows months of back-and-forth between Prime Minister Mark Carney and U.S. President Donald Trump. Within the first months in the office, Trump's administration imposed tariffs on Canadian steel, aluminum, and autos. Ottawa retaliated with countermeasures, and while both sides have signaled progress, concrete results have so far been elusive.
Carney, who has met Trump multiple times— including an Oval Office visit in May and another meeting earlier this month — sought to temper expectations.
"We'll see. We are in ongoing discussions with the Americans, and I wouldn't overplay it," he told reporters in Ottawa, according to Reuters. Carney added that he expects to meet Trump again at APEC.
An agreement between the two would reshuffle the pieces on the commodities board. Canada supplies nearly half of all aluminum imported by the U.S., and roughly one-fifth of its iron and steel. Earlier this year, the U.S. aluminum industry urged Washington to avoid tariffs, warning that shrinking domestic smelting capacity had left the country dangerously reliant on imports.
For Canada, a reduction in tariffs would relieve mounting pressure on manufacturers and exporters hit hard by months of trade friction. Carney's team has already rolled back several retaliatory duties imposed under his predecessor. Furthermore, he has extended targeted tariff relief on select U.S. and Chinese metal products to help domestic industries caught between two trade fronts.
Skepticism Remains Despite Momentum
Despite optimism, structural issues remain. Negotiations have not covered softwood lumber or automobile tariffs — long-standing flashpoints in the bilateral relationship. Energy cooperation, including a possible revival of the Keystone XL pipeline project, has reportedly been discussed but not formally included in the deal framework.
Trade Minister Dominic LeBlanc mirrored Carney's skepticism. According to Bloomberg, he called claims of an imminent deal "a bit overoptimistic." Yet, acknowledged "positive momentum," noting that negotiations have reached a previously unseen level of detail.
The trade tensions have compounded the broader economic strain. S&P Global puts Canada's average real GDP growth at 1.2% for 2025 and 1.4% for 2026.
Weak oil prices have also not helped the cause. Despite the worst year for the US dollar in recent history, the Canadian dollar has made barely any gains. The currency, which is positively correlated with oil, has advanced less than 3% year-to-date against the U.S. greenback.
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