Canadian Prime Minister Mark Carney announced Saturday that significant progress has been made toward a trade deal with the United States, following discussions with President Donald Trump and senior U.S. officials. This development comes after negotiations between the two countries stalled in August.
Before embarking on his trip to Europe and Asia, Carney spoke with Trump and U.S. Trade Representative Jamieson Greer, along with Trump’s new White House chief of staff, Stephen Miller. Carney described their conversation as “lengthy” and “substantive,” indicating the possibility of a bilateral deal while cautioning that an agreement has not yet been reached.
As part of Canada’s efforts to lessen its reliance on the U.S. during ongoing trade tensions, Carney announced the completion of free-trade negotiations with the Association of Southeast Asian Nations (ASEAN) and a separate agreement with the Philippines. The ASEAN bloc represents nearly 700 million people. Both agreements aim to bolster Canada’s economy in light of tariffs imposed by the U.S.
During his visit to Manila, Carney emphasized that Canada would not accept a deal that undermines its auto industry, which has been severely impacted by U.S. tariffs. The stalled negotiations earlier this year were partly due to U.S. demands that Canada found unacceptable, leading to a 50% tariff on approximately $20 billion worth of Canadian goods. Canada retaliated with its own tariffs in September.
With one of the world’s largest trading relationships, the potential trade deal could alleviate tariffs affecting critical sectors, including steel and aluminum. In previous remarks, Trump mentioned that the countries were “very close” to reaching an agreement, with Carney noting that the U.S. had backed off demands related to Canadian cultural protections and trade agreements.
The upcoming U.S. midterm elections have spotlighted tariffs on Canadian goods, with Democratic leaders attributing increased prices to these measures and promising to contest them. This political context presents a challenge for Canada as it weighs the options of accepting a reduced tariffs deal or holding out for more favorable trade conditions.
Carney projects that the ASEAN agreement could inject nearly CAD 2 billion (around USD 1.4 billion) into Canada’s economy and generate close to 14,000 jobs, particularly in agriculture and manufacturing. Officials expect to sign this agreement next year, along with the deal with the Philippines, which would cover over 90% of tariff lines and could significantly boost Canadian exports to the country by 2035.
Before the ASEAN summit in Manila, Carney attended the European Political Community summit in Ireland. He is scheduled to participate in the Francophonie summit in Cambodia and the Asia-Pacific Economic Cooperation summit in China, where he will meet with President Xi Jinping. Carney has made it a priority to double Canadian exports to non-U.S. markets by 2035.
