The US and Canada are working on a deal to ease US tariffs on Canadian steel and cars, six sources told Reuters. A Canadian source said a deal was possible before the November 3 midterm elections, but US sources said Washington wants more concessions.
At a glance
- The talks cover Section 232 tariffs of up to 50% on Canadian steel and 25% on autos.
- US Commerce Secretary Howard Lutnick is at the centre of the negotiations.
- Prime Minister Mark Carney said there has been "a slight intensification" in talks.
Background
Section 232 of US trade law lets the president impose tariffs on imports judged to threaten national security. The US has used it to put tariffs on steel and car imports. Trade talks between the US and Canada broke down in August, and relations between the neighbours have been strained since.
What happened
The US and Canada are working on a deal to ease US tariffs on Canadian steel and autos, two US and four Canadian sources told Reuters, Moneycontrol reported on October 27. The talks focus on Section 232 tariffs, including up to 50% on Canadian steel and 25% on autos.
One Canadian source said a deal was possible before the November 3 midterm elections, while US sources said the Trump administration wanted Canada to make further concessions.
Who is negotiating
Because the Commerce Department runs the Section 232 tariffs, Commerce Secretary Howard Lutnick, not the US Trade Representative's office, is at the centre of the talks. Lutnick and Dominic LeBlanc, Canada's minister for Canada-US trade, have been in regular contact recently.
Canadian Prime Minister Mark Carney said there had been "a slight intensification" in talks. "To the extent any progress has been made, it's because the US is coming closer to our position," he told reporters.
What it means
Tariffs on Canadian goods have become a political liability for President Donald Trump, with Republican candidates in border states calling for an end to the trade war. Any deal may be limited. "If it happens, it'll happen fast. But my sense is it'll be a narrowed deal, if it even happens," a Canadian industry source said.
Our read
Outlook: neutral. Lower tariffs would change North American steel trade flows, but a deal is not certain and its scope is unclear.
What to watch
- Whether a steel and auto deal is announced before the November 3 midterm elections.
- Which concessions the US asks Canada to make.
- Whether any deal also covers aluminium tariffs.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-10-27: Sources tell Reuters the US and Canada are negotiating to ease steel and auto tariffs.
- 2026-11-03: US midterm elections, the date a Canadian source said a deal could come before.
Geopolitical Risks
US-Canada trade relations have been strained since talks broke down in August.
What could lift prices
- Lower tariffs could revive Canadian steel exports to the US.
- A deal would ease costs for carmakers that use Canadian steel and parts.
What could weigh on prices
- More Canadian steel in the US market could weigh on high US steel prices.
- Talks could fail, keeping tariffs at up to 50%.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Canada | High | Its steel and car exports to the US face tariffs of up to 50% and 25%. |
| United States | High | Tariffs on Canadian goods have become a political issue before the midterms. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Steel | Positive | Canadian steelmakers could regain easier access to the US market. |
| Automotive | Positive | Lower tariffs would cut costs for cross-border car production. |
Who gains, who loses
- Canadian steelmakers: They could face lower tariffs on sales to the US.
- US steelmakers: They could face more competition from Canadian steel if tariffs fall.
Other ways this could play out
- If a narrow deal is reached before November 3, steel and auto tariffs could fall quickly.
- If the US demands more concessions, talks could drag on and tariffs stay in place.
Price risks
- A political shift after the midterms could change US trade priorities.
- Any deal may leave out aluminium and other goods.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
Canada
United States