US and Canada step up trade talks, but with no concessions a deal is still not near

Washington and Ottawa have increased the tempo of their trade talks over the past week, but neither side has yet offered concessions. People with knowledge of the talks say a deal is therefore still far from near.

The tempo rose after President Donald Trump and Prime Minister Mark Carney spoke by phone on Oct. 21.

Commerce Secretary Howard Lutnick, who helped torpedo a previous round of negotiations over the summer, and Canadian Trade Minister Dominic LeBlanc have been speaking regularly since then, according to two people with knowledge of the talks, granted anonymity because they were not authorized to speak publicly. They have primarily discussed Trump's tariffs on sectors like autos and steel, which have been a sticking point for Canada all along.

A senior Canadian government official said talks remain informal as of Tuesday.

Carney described the uptick in engagement as 'un petit intensification', speaking in French to reporters in Ottawa on Monday. The engagement has triggered headlines on both sides of the border and White House boasts that a deal is near. Trump predicted at a rally on Sunday in Michigan that the North American trade spat would be settled pretty soon.

Unlike Trump, however, Carney has little political incentive to make concessions at the moment. He is riding high in domestic polls after standing up to the American president and walking away from trade negotiations in August, and he is days away from welcoming European Union leaders to Montreal for a landmark summit.

Neither side has dropped its original demands, according to half a dozen current and former government officials, industry representatives and others with knowledge of the talks. The outstanding points include Carney's ask for lower auto tariffs and Trump's push for increased access to the Canadian alcohol and dairy markets.

The lack of new concessions or tangible breakthroughs is a sign that the recent outreach may be more a White House effort to soothe Republicans' midterm worries than to secure an immediate deal. The people say any denouement is likely weeks if not months off.

Senator Bernie Moreno, a Republican from Ohio, said in an interview that he thinks a deal will be made with Canada. Asked if the deal will come before the election, Moreno said he did not know.

Canada has also been cautious about promising that a deal is near. Carney said last week Ottawa does not care about the timing of an agreement to roll back tariffs. Both Mark Wiseman, the Canadian ambassador to the US, and Pete Hoekstra, the US ambassador to Canada, suggested at an event in Ottawa on Monday that there will be a deal, even if it takes time.

Wiseman said a longer timeline has to be taken into account and that, at the end of the day, neither side is moving out of the neighborhood and they are going to make it work. He said the state of the relationship is pretty good.

Tensions had hit a crescendo this summer, when Trump announced a preliminary deal with Carney to lower US duties before talks collapsed at the 11th hour. Washington and Ottawa then traded 50% duties on about $20 billion worth of goods, with Trump imposing a ban on certain products, like alcohol, and threatening even more punitive duties come January if their differences have not been resolved.

The forces that caused the deal to unravel in August are still in place. Canada has continued to seek lower tariff rates for key sectors, including autos, trucks, steel and aluminum. The previous talks hit a snag over whether the US would lower tariffs on heavy duty trucks, some of which are built in Ontario.

A White House official confirmed Lutnick and US Trade Representative Jamieson Greer have held discussions with their Canadian counterparts in recent days. The Commerce Department and the Office of the US Trade Representative did not respond to requests for comment.

The Canada tariffs are unpopular among US voters and have been a headache for Republican candidates in border states. Senator Susan Collins of Maine has come out against them, among other Republicans. Trump's National Economic Council director Kevin Hassett told Fox News on Sunday that the two sides are very close to a deal and emphasized Lutnick's involvement, but a person close to the administration said no one expects a deal.