U.S. and Canada working on deal to ease steel and auto tariffs, sources say

U.S. President Donald Trump speaks with Canadian Prime Minister Mark Carney in Evian-les-Bains, France, in June. Tariffs on Canadian imports have become a political liability for Trump. | REUTERS

Oct 27, 2026

OTTAWA/WASHINGTON – The United States and Canada are working on a deal to ease U.S. tariffs on Canadian steel and autos, two U.S. and four Canadian sources said, as the two governments try to repair relations that soured after trade talks broke down in August.

The talks focus on tariffs imposed under Section 232 of U.S. trade law, including up to 50% tariff on Canadian steel and a 25% tariff on autos, with negotiators discussing potential relief from those duties.

Just 32% of Americans approve of U.S. President Donald Trump, and his Republican Party risks losing control of Congress in next week’s midterm elections. Tariffs on Canadian imports have become a political liability for Trump, with Republican candidates in border states calling for an end to the trade war with Canada.

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