Canada and US trade deadlock

Prime Minister Mark Carney and President Donald Trump are still stuck in a trade standoff that has outlasted several rounds of public signaling and private talks. The dispute is not over a single tariff line. It now runs across steel, aluminum, autos and a wider set of political grievances that have complicated contact between Ottawa and Washington. Canadian government materials show Canada removed most of its retaliatory tariffs on U.S. goods in September 2025, but kept duties on steel, aluminum and automobiles in place while negotiations continued. The impasse is showing up just as both governments face the next major checkpoint in North American trade. Ottawa says the United States now exempts CUSMA-compliant goods from its temporary 10% global tariff under Section 122, but still applies sectoral tariffs including 50% duties on steel and aluminum and 25% tariffs on autos and trucks. Canada’s countermeasures remain in place on the same politically sensitive sectors. (canada.ca) ### Which tariffs are still actually in force? Canada’s Finance Department says 25% counter-tariffs remain on U.S. steel, aluminum and automobiles. Ottawa lifted other retaliatory tariffs on most U.S. imports effective September 1, 2025, after Washington allowed most Canadian goods to enter tariff-free under CUSMA rules. The Trade Commissioner Service says the United States still maintains 50% tariffs on steel and aluminum under Section 232, with no CUSMA exemption for those sectors. (tradecommissioner.gc.ca) The same Canadian government page says the U.S. also keeps 25% tariffs on autos and trucks, though the U.S. content of CUSMA-compliant vehicles is exempt on a model-by-model basis. (canada.ca) ### Why have negotiations stalled if most goods are flowing? The National Post, in a report republished by Yahoo Canada on May 21, said Trump’s complaints now range beyond tariffs into a broader list of political irritants. The report said those grievances have included a Ronald Reagan-themed anti-tariff ad, Carney’s electric-vehicle deal with China, his Davos speech, friction over auto policy and criticism around a meeting with former President Barack Obama in Toronto. (tradecommissioner.gc.ca) That same report said there had been talk of U.S. demands for “entry fees” before formal talks could begin and quoted Dimpee Brar of Allies for a Strong Canada as saying some Republicans doubt Ottawa is serious about reaching a deal. Brar said, “They don’t even believe that Canada is serious about seeking a deal.” ### Did Carney and Trump get close to a deal before this? (ca.news.yahoo.com) Politico reported on May 5 that Canada and the United States had been close to an interim agreement after an October 2025 White House meeting. The report said senior U.S. officials discussed a framework covering steel, aluminum, uranium and energy, and that both sides were told to put the deal on paper. Pete Hoekstra, the U.S. ambassador to Canada, told Politico the October meeting was “an awesome meeting.” Politico reported that talks then collapsed within 16 days, with Trump publicly blaming an Ontario anti-tariff ad campaign while officials told the publication the auto sector had become a deeper source of friction. (ca.news.yahoo.com) ### How much of this is trade and how much is politics? (politico.com) May 6, 2025, offered a public example of how closely the two issues are now tied. During Carney’s White House visit, Trump said there was nothing the Canadian leader could say in that meeting that would get tariffs lifted, according to ABC News’ account of the Oval Office exchange. Carney, in the same appearance, rejected Trump’s repeated suggestion that Canada could become the 51st state and said the country was “not for sale,” according to Reuters video coverage and other contemporaneous reports. (politico.com) Trump has also framed the relationship in market-access terms. CNBC’s May 6, 2025 report quoted him as saying, “They have to sign deals with us,” not the other way around. ### What is the next concrete milestone? The 2026 review of the Canada-United States-Mexico Agreement is the next formal trade deadline hanging over both governments. CBC reported in April 2026 that Carney said talks with the Trump administration on renewing CUSMA could take longer than expected, while Ottawa pushed for what it called a mutually beneficial agreement. (abcnews.com) For now, the negotiators are still dealing with the same sectors that were left unresolved in 2025: steel, aluminum and autos. (cnbc.com) Canadian government pages updated for exporters say those U.S. tariffs remain active, and Ottawa’s own counter-tariffs stay in place as negotiations continue. (tradecommissioner.gc.ca) (cbc.ca)