Canada and United States revive trade talks after August breakdown
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Ottawa and Washington have agreed to restart formal trade negotiations, trying once again to repair the damage left by tariff-driven bargaining that collapsed in August, with both governments now claiming to want a deal that actually works for ordinary people on both sides of the border.
Ottawa and Washington announced on Sunday that formal trade talks will resume, marking the third round of negotiations in just over a year and underscoring how often the corporate-friendly trade agenda has stalled under the weight of competing demands. Prime Minister Mark Carney said he had spoken with President Donald Trump about “the outlines of a mutually beneficial trade deal” and that “our teams will now be working in the coming weeks to deliver that outcome.”
The talks are meant to revive discussions that collapsed in August, when negotiators in Washington spent weeks trying to lower, but not eliminate, tariffs on key Canadian industries in exchange for concessions from Ottawa. At that time, the United States pressed for the removal of Canadian retaliatory tariffs on automobiles, steel, aluminum and wood, along with changes to dairy quota allocations and other trade measures. Canada’s main objective was relief from Section 232 tariffs on automobiles, steel, aluminum and wood, seeking lower rates rather than full removal.
Details of the August proposal, as reported, included a reduction of U.S. tariffs on Canadian cars to 15% from 25%, with a carve-out for U.S. parts that would bring the effective rate into single digits. Steel and aluminum tariffs would have been cut to 25% from 50%, subject to a four-million-tonne quota for steel. In return, Canada would have restocked U.S. alcohol, lifted procurement restrictions, withdrawn retaliatory tariffs and accepted the U.S. interpretation of dairy import-license allocation.
Carney later said the United States asked for too much and offered too little, pointing to unresolved issues such as tariffs on medium- and heavy-duty trucks, proposed changes to online streaming rules requiring promotion of Canadian (including French-language) content, and language that could limit Canada’s ability to negotiate future trade agreements. Canada’s chief trade negotiator Janice Charette noted that her team never saw a full draft of the proposal, making it difficult to judge the scale of the U.S. demands.
Since the August collapse, both countries have implemented and adjusted tariffs on roughly $28 billion worth of goods, with each side removing some duties while adding new ones to keep overall levy levels in place. The renewed talks seek an “off-ramp” from the ongoing trade dispute and a path toward a more stable economic relationship, though the outcome will depend on whether the two governments can move beyond demands that have repeatedly favored powerful industries over public interests.