Carney Reports 'Good Conversation' With Trump on Trade Two Days Before Midterms; August Tariffs Still in Place

Since Canada walked away from formal trade talks on Aug. 21, the two countries have traded tariffs and accusations. On Sunday, Nov. 1, Prime Minister Mark Carney said he had a "good conversation" with President Donald Trump.

Carney posted on social media that the exchange "builds on our recent constructive discussions" about a possible deal. He described a deal that would create jobs, improve affordability for families and respect Canada's languages, culture and sovereignty. "Our teams will now be working in the coming weeks to deliver that outcome," he wrote, tagging Trump's account.

Carney did not say when or how the conversation took place. He announced no agreement.

Formal talks and the auto problem

A senior source told CBC News that formal negotiations are set to begin again. The same source said autos are expected to be a key sticking point, as they were in August.

Until now the contacts have stayed at the political level, with Canada-U.S. Trade Minister Dominic LeBlanc leading for Canada, according to sources who spoke to Global News. Canada's lead negotiator, Janice Charette, said on Oct. 22 that no timeline existed for restarting formal talks. She also said she did not expect Washington to remove tariffs entirely because of the revenue they generate.

Reuters, citing four Canadian and two U.S. sources, reported that the two sides were working on a deal to ease U.S. tariffs on Canadian steel and autos.

How the dispute got here

Talks collapsed on Aug. 21. The U.S. put 50 percent tariffs on about $27.6 billion worth of Canadian goods starting Aug. 22. Canada answered with tariffs of 15 to 50 percent on a matching value of U.S. imports, effective Sept. 8.

Carney has said Washington crossed Canadian red lines in August. He listed French-language and cultural protections, Canada's freedom to negotiate trade deals with other countries, tariff treatment of medium- and heavy-duty trucks, and the softwood lumber dispute.

The U.S. government gave a different account. It said Canadian negotiators introduced last-minute demands and backed away from earlier commitments.

Trump has recently said he would lift some of the 50 percent tariffs on Canada at the end of October. He also said he would add tariffs on dozens of new products, including Canadian garbage and sewage, according to the Canadian Press.

Mixed signals in the final week

Public messaging from both capitals has been inconsistent. At an Oct. 25 rally in Port Huron, Michigan, Trump said a deal would come "pretty soon." He added: "Canada has been ripping off the United States for years, OK? For years."

On Oct. 26, Carney said any progress reflected Washington moving closer to Canada's position. He also said he could not guarantee Trump would honor whatever the two sides sign. "I don't know that," he said when asked.

On Wednesday, Oct. 28, Carney told reporters ahead of a Liberal caucus meeting: "If those deals present themselves we will pursue them, but we're not at that position right now."

In an interview with POLITICO in Montreal on Friday, Oct. 30, he said Canada could wait for a new American president if necessary. "American families, American businesses, will also lose out because of that," he said. He added that "Canadians are tired of" the diplomatic provocations from the U.S.

Sources told CBC News last month that Canadian officials had been telling industry groups a deal was unlikely before Tuesday's vote.

Election-week friction

The midterms fall on Tuesday, Nov. 3, and several key races are in border states sensitive to Canadian trade, including Michigan and Maine. Michigan Republican Senate candidate Mike Rogers released an ad last month asking Trump to end the trade war with Canada.

The U.S. embassy in Ottawa also circulated a document to reporters accusing Canadian government officials of "potential interference in US elections." U.S. Ambassador Pete Hoekstra later said on a podcast that American authorities had made no "definitive" determination that Canadian political figures engaged in improper meddling. Carney declined to say whether he had raised Hoekstra's comments with Trump.

What comes next

Carney has not said what changed since Wednesday, when he said Canada was not in a position to agree to anything. Nor has he said whether the U.S. has moved on the autos and truck issues that sank the August round.

The next concrete marker is the resumption of formal negotiations that Carney said will take place "in the coming weeks," after the Nov. 3 vote. Ottawa also tables its federal budget on Nov. 5.