Ahead of the November 3, 2026 U.S. midterm elections, Washington and Ottawa are negotiating potential relief from Section 232 tariffs of up to 50% on Canadian steel and 25% on automobiles. U.S. President Donald Trump faces political headwinds, including a 32% approval rating in a Reuters/Ipsos poll and pushback from GOP candidates in border states over inflation. Canadian Prime Minister Mark Carney maintains Ottawa will not yield on key red lines, while industry leaders like Honda warn that proposed tariff hikes would prove catastrophic.
US-Canada tariff negotiations
- ▪Canadian Prime Minister Mark Carney stated on October 26, 2026 that recent progress in trade talks occurred because the United States moved closer to Canada's position.
- ▪The United States and Canada are conducting talks to negotiate potential relief from U.S. Section 232 tariffs on Canadian steel and automobiles.
- ▪U.S. Commerce Secretary Howard Lutnick and Canadian Trade Minister Dominic LeBlanc have been holding regular discussions regarding trade tariffs under Commerce Department authority.
- ▪U.S. President Donald Trump stated during an October 25, 2026 rally in Michigan that the trade dispute with Canada would be settled pretty soon.
- ▪Previous broad trade negotiations between the United States and Canada collapsed in August 2026, leading to reciprocal 50% tariffs on approximately $20 billion worth of goods.
Section 232 steel duties
- ▪Domestic manufacturing representatives met with officials from the U.S. Commerce Department and the USTR to lobby in favor of maintaining existing duties on Canadian steel, aluminum, and autos.
- ▪U.S. President Donald Trump has threatened to double tariffs on Canadian imports, including steel and auto products, to 50% on January 1 if no bilateral agreement is finalized.
- ▪The United States currently imposes tariffs under Section 232 of up to 50% on Canadian steel imports.
Automotive tariff relief talks
- ▪Disagreements over whether the United States would lower tariffs on medium- and heavy-duty trucks built in Ontario contributed to the collapse of trade talks in August 2026.
- ▪U.S. Trade Representative Jamieson Greer announced earlier in 2026 that the U.S. would shift the USMCA into an annual review process rather than an automatic 16-year extension.
- ▪U.S. negotiators and Canadian counterparts are discussing potential relief from a 25% Section 232 tariff on Canadian automobiles and automotive components.
Midterm election political pressure
- ▪U.S. President Donald Trump unilaterally removed 50% tariffs on select Canadian agricultural, paper, and forestry imports following appeals from Republican Senator Susan Collins of Maine.
- ▪A Reuters/Ipsos poll released ahead of the November 3, 2026 U.S. midterm elections indicated that President Donald Trump's public approval rating stood at 32%.
- ▪Republican candidates in U.S. border states, including Michigan, Maine, Alaska, and New Hampshire, have voiced opposition to tariffs on Canadian goods ahead of the 2026 midterm elections.
Industry warnings tariff impact
- ▪Automotive industry trade groups are advocating for a trilateral North American trade arrangement including Mexico, rather than bilateral agreements, to preserve cross-border competitiveness.
- ▪American Honda Motor Co. Senior Vice President Jennifer Thomas warned that doubling tariffs on Canadian vehicles and parts to 50% on January 1 would be catastrophic for the automotive industry.
- ▪Honda Motor manufactures over 60% of the vehicles it sells in the United States domestically while operating major vehicle production facilities as Canada's second-largest producer.
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