Carney says US moving closer to Canada's trade demands as midterms approach

Canadian Prime Minister Mark Carney said yesterday that trade discussions with US President Donald Trump’s administration had intensified slightly, but any progress reflected Washington’s movement closer to Canada’s position.

The remarks came eight days before the US midterm elections, as White House economic Adviser Kevin Hassett suggested that the two countries were nearing a trade deal.

“To the extent any progress has been made, it’s because the US is coming closer to our position,” Carney said.

The office of Canadian Trade Minister Dominic LeBlanc said Canada remained engaged in “constructive dialogue” with Washington.

Carney described a “slight, slight intensification” in the discussions but stressed that Canada’s negotiating position had not changed.

He also acknowledged that he could not be certain Trump would honour a new trade agreement. Asked whether the US president would “sign in pen,” following Carney’s earlier warning that Washington’s signature was sometimes “written in pencil,” he replied, “I don’t know that.”

Canada rejected Washington’s terms in August after the two countries appeared close to reaching an agreement. Carney said the proposed terms crossed Canada’s “red lines.”

Trump subsequently imposed 50% tariffs on roughly $20 billion worth of Canadian goods, prompting retaliatory measures and further trade restrictions.

On Friday, Trump said he would remove some 50% tariffs on Canadian goods while imposing new tariffs on dozens of other products.

Two days later, addressing a campaign rally in Michigan, he said Canada was “willing to give us anything at this moment” and predicted that a deal would be reached “pretty soon.”

Trump also told a Detroit television station that an agreement could be reached before the midterm elections, although negotiations might take months to conclude.

The tariffs have emerged as an issue in closely watched Senate races ahead of the elections.

In a campaign advertisement in Michigan, Republican candidate Mike Rogers said Canada was “not our enemy” and called for an end to the trade dispute, saying, “we need to end this tariff war now.”

In Maine, Republican Senator Susan Collins urged the Trump administration to ease tariffs on Canadian goods used by farmers and other businesses. Washington announced exemptions on Friday.

Trump has repeatedly criticised the US trade deficit with Canada, although energy trade more than accounts for the gap.

The United States imports millions of barrels of Canadian oil every day, typically at a discount, while maintaining a trade surplus with Canada when energy is excluded.

Trump has also sought to persuade automakers to shift production from Canada to the United States, threatening an industry that has been deeply integrated across the two countries for decades.

Trump’s trade war and repeated threats to make Canada the 51st US state have prompted Carney to pursue alternative export markets.

The Canadian prime minister has set a goal of doubling the country’s exports to markets outside the United States over the next decade.

Carney is scheduled to host European Union leaders in Montreal on Thursday and Friday to pursue closer economic and security ties.

European Commission President Ursula von der Leyen has proposed making Canada the EU’s first associate member, although the status has yet to be defined.