Canada and US Making Progress on Trade Deal, Carney Says After ‘Long, Substantive’ Talks With Trump
Canadian Prime Minister Mark Carney said on Saturday that Canada and the United States are making progress toward a bilateral trade deal after lengthy talks with U.S. President Donald Trump, though the two sides have not yet reached an agreement. Speaking to reporters in Manila, where he is on a state visit to the Philippines and meeting Southeast Asian leaders, Carney said the auto sector remains the hardest issue in the negotiations — and one he will not trade away.
Carney: “We are making progress”
Carney told reporters he had a “long, substantive conversation” with Trump just before leaving for his current trip, which has taken him from Dublin to Asia for three summits. White House Chief of Staff Stephen Miller and U.S. Trade Representative Jamieson Greer were among those on the call, according to The Globe and Mail.
“We are making progress. There is the possibility of a deal, a bilateral deal, but we’re not yet there,” Carney said.
He said he sees a one-on-one deal with the United States that would scale back the U.S. tariffs now covering steel, aluminum and autos. Carney also said Canada would not walk away from NATO and that the security architecture for a free Europe would be determined by a free Europe and NATO, not Russia.
Autos at the center of the talks
Carney called the auto talks “one of the most challenging issues in negotiations” with Washington, and said the sustainability of Canada’s auto industry — which depends on continued access to the U.S. market — is non-negotiable. He said he wants terms under the U.S.-Mexico-Canada Agreement that would “preserve the long-term viability” of the Canadian auto sector.
“This government will not settle for a deal with the United States that is not consistent with a viable Canadian auto sector,” Carney said, adding that “there’s lots of people who think that we should just go and take whatever deal.”
The Trump administration’s 25 percent tariff on Canadian-made autos — minus a carve-out for U.S. parts in the vehicles — has put severe pressure on an industry that typically exports nearly 90 percent of its production to the United States. The value of Canadian passenger car and light truck exports to the U.S. fell nearly 12 percent from 2024 to 2025, and exports are tracking even lower in 2026.
Carney said Canada is making headway on terms for autos, in part because the competitiveness of the Canadian auto sector also benefits the U.S. industry. “The longer-term competitiveness of the U.S. auto sector is determined by many factors, including the degree of integration with the Canadian auto sector,” he said.
In August, Washington offered to lower the headline tariff rate to 15 percent as part of a broader trade deal that would have reduced the sectoral duties, known as Section 232 tariffs, on several key Canadian industries in return for concessions from Ottawa. The U.S. parts carve-out would have been maintained, but the tariff relief would not have been extended to medium- and heavy-duty trucks. Many in the Canadian auto industry balked at the proposal and applauded Carney’s decision to walk away from the negotiations — a choice that has left an unsustainable status quo for the sector.
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Why this matters
A deal would matter well beyond Ottawa and Washington. The North American auto industry is deeply integrated, with parts and finished vehicles crossing the Canada-U.S. border many times before a car reaches a showroom. Tariffs on that flow raise costs for manufacturers on both sides and, eventually, for American car buyers.
Carney also noted that the North American auto industry as a whole faces significant competitive challenges because of the speed of change and the shift to electric vehicles — a transition he said will require “big investment” to keep the industry competitive.
The pressure to deliver is growing at home. Multinational automaker Stellantis is trying to sell its idled Brampton, Ontario, plant to an armored vehicle manufacturer, and Industry Minister Mélanie Joly said Friday that Ottawa and the Ontario government, along with the union representing workers at the plant, have put an “aggressive package” in front of Stellantis and remain “in solution mode to prevent the sale.” Carney declined to offer details of that package.
For background on how the two countries have handled trade tensions this week, see China and US Hold First Trade Council Meeting on Tariffs and Farm Trade Ahead of Xi-Trump Talks, and for the latest on the Brampton plant standoff, see Canada Offers Stellantis a New Deal to Save Its Brampton Plant a Day After Threatening to Sue.
Latest developments
Carney’s trip is also producing deals elsewhere. Speaking in Manila, he announced that Canada had wrapped up talks on a trade agreement with the Philippines — a separate pact from the U.S. negotiations.
No date has been set for a conclusion to the U.S. talks, and neither side has said when Carney and Trump might speak again. For now, the message from Manila is measured: progress, but no deal yet.
Frequently asked questions
Is there a Canada-U.S. trade deal yet?
No. Carney said the two countries are making progress and that a bilateral deal is possible, but stressed that “we’re not yet there.” Negotiations are continuing.
Which tariffs are at the center of the talks?
The main ones are the 25 percent U.S. tariff on Canadian-made autos, with a carve-out for U.S. parts, and the Section 232 duties on steel and aluminum. Washington offered in August to cut the headline auto tariff to 15 percent, but Ottawa walked away from that proposal.
Why is the auto sector so important to the talks?
Canada’s auto industry exports nearly 90 percent of its production to the United States, so U.S. tariffs hit it directly. Car and light truck exports to the U.S. fell nearly 12 percent from 2024 to 2025, and Carney has said a viable auto sector is non-negotiable in any deal.
What to watch next
The next signal will be whether the two sides move from general progress to specific terms on autos, steel and aluminum — and whether the August offer of a 15 percent auto tariff becomes the starting point for a final deal. Until then, Canadian automakers keep paying the 25 percent rate, and the Brampton plant fight remains a reminder of what is at stake.
Sources: Reuters; The Globe and Mail
