US, Canada working on deal to ease steel, auto tariffs, sources say

What happened

The United States and Canada are working on a deal to ease US tariffs on Canadian steel and autos, sources said. Talks focus on duties under Section 232, including up to 50% on steel and 25% on autos.

Confirmed

Global impact / market context

Lower steel and auto tariffs would cut costs for Canadian exporters and US buyers of those goods. That could lift sales and profit per sale for affected manufacturers, while easing a political problem for Republican candidates in border states before the midterms.

Analyst inference

Tariffs of up to 50% on steel and 25% on autos raise costs across supply chains that cross the border. Any relief would change how investors weigh Canadian producers and US manufacturers, with timing tied to the November 3 elections and Canada's concessions.

Analyst inference

What to watch

1. Commerce Secretary Howard Lutnick, not the US Trade Representative's office, is central to the talks because the Commerce Department administers Section 232 tariffs, sources on both sides said. Confirmed
2. A deal on steel and auto tariffs may be possible before the November 3 elections, one Canadian source briefed on the negotiations said, while US sources said Washington wants more concessions. Proposed
3. Watch whether Canada offers further concessions on steel and autos; that would show whether relief actually reaches exporters and US buyers, or talks stall after the midterms. Analyst inference

Evidence

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