Taken at face value, a thaw in US-Canada trade relations would support the Canadian dollar and trade-exposed Canadian equities, which have carried the cost of months of tit-for-tat tariffs. Markets are likely to discount the headline until there is text to read, though, because neither side has said what tariffs would change or when. The timing, two days before midterms in which tariffs on Canada are a live issue in some border states, also invites scepticism over how much is policy and how much is campaign messaging. Any detail from the negotiating teams in the coming weeks will matter far more to the loonie than Sunday’s remarks.
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Washington and Ottawa are now very close to a deal in concept, which is reassuring for anyone who trades concepts, while everyone else waits for something with tariff rates in it.
Summary:
Trump said on Sunday that the US and Canada have the concept of a very good trade deal and are very close to an agreement, but gave no details
He said he spoke with Canadian Prime Minister Mark Carney on Saturday and that the deal would be good for US farmers
Carney described a good conversation that built on recent constructive talks about the outlines of a mutually beneficial deal
Carney said any deal must create jobs, improve affordability and fully respect Canada’s languages, culture and sovereignty, with teams working toward it over the coming weeks
The two countries have imposed billions of dollars in tariffs on each other, an issue in some US border states ahead of Tuesday’s midterm elections
US President Donald Trump said on Sunday that Washington and Ottawa have the “concept” of a new trade deal and are very close to an agreement, though he declined to say what it might contain.
Speaking to reporters after arriving in Dubuque, Iowa, Trump said he had spoken with Canadian Prime Minister Mark Carney on Saturday. He described the deal under discussion as very good, and said it would benefit American farmers and the country as a whole. He did not give a timeline or any detail on tariffs, market access or which sectors would be covered.
A concept is, of course, a well-established stage in trade diplomacy. It sits somewhere after a phone call and some distance before anything a customs officer could use. For now, markets and exporters on both sides of the border have an adjective, “very good”, rather than a document.
Carney offered a similarly upbeat, if slightly more measured, account. In a post on X, he said he had a good conversation with Trump about the future of trade between the two countries. He said the exchange built on recent constructive discussions about the outlines of a mutually beneficial deal. Carney said such an agreement should create jobs, improve affordability and fully respect Canada’s languages, culture and sovereignty, adding that negotiating teams would work over the coming weeks to deliver it. His description puts the two leaders roughly in agreement, with a concept on one side and outlines on the other.
The comments follow months of trade conflict, with both countries imposing billions of dollars in tariffs on each other. The dispute has become a political issue in some northern US border states, including Michigan and Maine, ahead of Tuesday’s midterm elections.
The next test is whether the coming weeks of talks produce concrete terms. Until negotiators set out which tariffs would be removed or reduced, and on what schedule, the deal remains more aspiration than agreement. Businesses on both sides of the border will be looking for something they can price.
This article was written by Eamonn Sheridan at investinglive.com.
