No Canada-U.S. Trade Deal Expected Before Midterms as Trump Threatens 50% Tariffs
Canadian officials have told industry groups that a trade agreement with the United States is not expected before the Nov. 3 midterm elections, while President Donald Trump has threatened to raise tariffs on Canadian autos and steel to 50% by January 2027.
Canadian government officials have informed industry groups that there is no expectation of reaching a Canada-U.S. trade deal before the American midterm elections on November 3, 2026. According to sources, there is currently no substantial engagement between Canadian and U.S. officials regarding an agreement, although the two sides remain in contact.
The White House is fully immersed in the election campaign, with President Donald Trump holding rallies amid polls suggesting an uphill battle for Republicans. Brian Clow, a former deputy chief of staff, stated that the window for a deal ahead of the midterms appears entirely closed.
Despite fading hopes for a pre-election agreement, Trump posted on Truth Social threatening to increase tariffs on all cars, trucks, automotive parts, and steel from Canada to 50%, effective January 1, 2027. U.S. Trade Representative Jamieson Greer declined to provide specific details on the status of possible new tariffs but denied that Canada is being specifically targeted.
Canadian industry officials, including Flavio Volpe of the Automotive Parts Manufacturers' Association, state they have not received any legal documentation or heads-up regarding the implementation of the threatened tariffs. The threat of increased duties on autos, parts, and steel could disrupt American automotive manufacturing.
The ongoing trade war stalemate has also influenced Republican candidates such as Susan Collins to distance themselves from Trump due to the unpopularity of the dispute. A potential change in U.S. congressional control may lead to investigations or legislative attempts to rein in the administration's trade policies.
However, Clow suggests that even if Democrats win the midterms, it would only provide a marginal benefit to Canada because Trump can use executive orders and veto power to continue his trade policies regardless of the election outcome.