Prime Minister Mark Carney welcomed Democrat plans to repeal United States tariffs on Canada, saying a return to free trade would lower costs for American families and support United States workers seeking stable, well paid jobs. Speaking in Winnipeg, Carney said Ottawa will keep negotiating with Washington as Congress prepares to challenge the tariffs, and he framed the Democratic move as welcome news for both sides of the border. It is the clearest sign yet that the midterm result has changed the politics of the trade war, even if it has not yet changed the tariffs themselves.
Why it matters
The congressional move has a timetable and a face. Democratic Senator Ron Wyden is expected to chair the Senate Finance Committee in January, and he has named Trump tariffs on Canada as an early repeal target. Senate Democratic leader Chuck Schumer introduced legislation in September to repeal the tariffs, and the new majority gives that effort a real chance of reaching a vote. Carney said Canada had not discussed the repeal bills with Wyden or other Democrats, and he kept the focus on talks with Washington rather than on legislative timelines.
The tariffs themselves remain in place, and they are the reason the talks matter. Canada paused trade negotiations in August after United States demands raised concerns in Ottawa about sovereignty and French language protections, and the trade war has included 50 percent tariffs on billions of dollars in Canadian goods. Carney said on Tuesday that Washington had stepped back from certain demands, and Trump said the two sides were very close to an agreement, with the concept of a deal that would be great for American farmers and fine for Canada. No final text has been released.
What happens next
The budget tabled on Thursday is the domestic side of the same argument. Titled Masters of Our Destiny, it proposes 142.1 billion Canadian dollars in multiyear spending and tax breaks, with total spending of 603 billion and a deficit of 62.3 billion for 2026-27, and it forecasts growth of just 1 percent in 2026 and 1.7 percent in 2027 because of the trade war. Carney aims to double exports outside the United States by 2035, and the budget declares plainly that the United States is upending global trade. The message is that Ottawa no longer treats the dispute as temporary.
Parliament now faces two tracks at once: the talks with Washington, and the legislation in Congress. The talks are the faster route, because a deal can be struck by the two governments without a vote, but the congressional repeal would be the more durable one, because a law is harder to reverse than a handshake. Carney will keep negotiating, and he will watch Congress. If Wyden moves quickly in January, the tariff war could end in law rather than in negotiation, and that would be the best outcome Canada could hope for.
