Canada is eyeing tariff relief after the United States midterm elections, with Trade Minister Dominic LeBlanc noting that negotiations on tariffs will be held with the White House, not Congress, as Ottawa presses for a deal. The message, delivered after the Democrats midterm sweep, is a reminder that the path to relief runs through the president, not through the new majority on Capitol Hill.
Why it matters
The stakes are high. On November 1, Prime Minister Mark Carney and President Donald Trump described their latest discussions as constructive, raising hopes for a trade agreement after months of growing tensions. But the history is discouraging: trade talks broke down in August, and the discussions since have centred on Section 232 tariffs of up to 50 percent on Canadian steel and 25 percent on autos, with Commerce Secretary Howard Lutnick and LeBlanc in regular contact.
The economic damage is already visible. Tariffs on Canadian imports have become a political liability in the United States, with Republican candidates in border states calling for an end to the trade war, and Trump has previously announced that he would raise the tariffs on steel and auto imports from Canada to 50 percent from January 1, 2027. For Ottawa, the risk is that relief arrives too late, or not at all, and the budget has already answered the longer question by betting on diversification.
What happens next
The energy dimension adds another layer. A deal on steel and autos was seen as possible before the November 3 midterm elections, according to sources briefed on the talks, but no agreement was announced, and both sides have kept their central demands. For Canada, the pipeline of talks with Washington is now the test of whether the constructive tone of November 1 can survive the politics of a new Congress.
What happens next will be decided in the White House, not in Parliament. The real test is whether Trump wants a deal or wants the tariffs, and whether the narrow steel and auto package that negotiators discussed can be revived. For Canada, the budget has already answered the longer question: diversify first, negotiate second, and never again depend on one customer.
