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

What happened

The United States and Canada are negotiating a deal to ease US tariffs on Canadian steel and autos, sources said. Talks focus on Section 232 duties, including up to 50% on steel and 25% on autos, after trade talks broke down in August.

Confirmed

Global impact / market context

Lower steel and auto tariffs would reduce costs for Canadian producers and US buyers, potentially lifting profit per sale and supporting capital spending. A deal could also ease political pressure before the November 3 elections, shifting investor expectations for trade-exposed companies.

Analyst inference

The talks follow collapsed August trade negotiations and come as President Trump faces low approval ratings before midterm elections. Republican candidates in border states want the trade war ended, making tariff relief politically important and giving Canada leverage in negotiations over concessions, which means the balance of bargaining power may shift.

Analyst inference

What to watch

1. Canadian sources said a steel and auto tariff deal was possible before the November 3 elections, while US sources said the Trump administration wanted Canada to make further concessions. Confirmed
2. Negotiators are discussing potential relief from Section 232 duties, which are tariffs imposed under US trade law allowing restrictions on imports deemed a national security risk. Proposed
3. Watch whether Commerce Secretary Howard Lutnick, who administers these tariffs, secures Canadian concessions, since the outcome could change costs for steel and auto companies and investor positioning. Analyst inference

Evidence

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