The ice may be thawing in the United States-Canada trade negotiations as the former heads into a contentious midterm season and the latter grapples with a flagging export economy.
The Trump administration on Friday added new exemptions to the list of Canadian products subject to 50 percent duties, including certain agricultural machinery as well as industrial goods like plywood, packaging and refrigeration products, while adding certain consumer goods to the docket to replace them. These exemptions will go into effect on Friday, the White House wrote in a memo.
Apparel and textiles, which were included in the Section 338 tariffs that took effect on Aug. 22, remain affected, and carpet was added to the list of tariffed goods.
On Monday, four U.S. and two Canadian sources revealed further progress in talks to Reuters. The two sides are reportedly aiming for a deal that would lower duties on Canadian cars and steel, imposed under Section 232 of the Trade Expansion Act of 1962. Currently, steel imports face duties of up to 50 percent, while the rate for autos is 25 percent.
Canadian Prime Minister Mark Carney responded to the report Monday, telling reporters at a press conference that Canadian trade officials remain engaged in a “constructive dialogue” with their U.S. counterparts. “To the extent any progress has been made, it’s because the U.S. is coming closer to our position,” he added.
Carney’s comments on the forward momentum of negotiations echo those of Trump economic advisor Kevin Hassett, who on Sunday told Fox News that the talks are “gathering steam” and that he believes the two sides are “very close to finally having a deal” on trade.
Washington’s moves come with just days to go before the midterm elections on Nov. 3, where Republicans are expected to face an uphill battle to maintain control of Congress due to widespread concerns about affordability and lingering inflation. These issues, made demonstrably worse by sweeping tariffs on thousands of products and dozens of U.S. trading partners and the war in Iran tying up vital oil exports, have damaged the perception of the president’s trade and foreign policy agendas.
The tariffs on Canada in particular have garnered scant support from voters, especially those in northern U.S. states that trade liberally with Canada.
A CNBC poll released Monday that the president—who is not on the ballot but whose presence looms large over the Republican party and the candidates fighting to maintain control over critical battleground states—is facing record low approval ratings as voters gear up to head to the polls. Conducted from Oct. 14-18, the survey of 1,000 registered voters revealed that a net -19 percent approve of the job the president is doing, with 40 percent approving and 59 percent disapproving.
The president fared even worse when it came to the economy, where 65 percent of respondents said they disapproved of his performance. An 80 percent majority rated the economy as “fair or poor” compared to just 20 percent who characterized it as “excellent or good.”
Notably, voters ranked government corruption highest on their list of what matters most to the country at this juncture, with 36 percent calling it the most important issue. Thirty-four percent ranked the price of groceries highest, and an equal number (23 percent) ranked the price of gas and protecting democracy as the most pressing issues of the moment.
Trump’s move, now, to roll back tariffs on Canada and perhaps take steps toward a more concrete easing of tensions or a trade deal—one ratified in ink, not “written in pencil,” as Carney said Monday—comes after months of strife between the two countries, which have deep trade ties due to their symbiotic import and export economies.
Reports indicate that the administration hopes that drawing down duties on certain products, especially industrial and agricultural ones, will help Republicans like Maine Senator Susan Collins, who has broken with the president in recent months on his tariff policies.
“I have asked for tariff relief for these important products and stressed the burdens additional costs impose on Maine businesses and families,” Collins said in a statement last week. “I will continue working directly with Administration officials to seek additional relief from tariffs and encourage a broader trade agreement with Canada, our neighbor, ally, and largest trading partner.”