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Is a Canada–US Trade Deal 'Very Close'? What Hassett, Carney and Trump Said, and What It Means for the TSX
- On October 25, White House economic adviser Kevin Hassett said the US and Canada are 'very close to finally having a deal.' He said Commerce Secretary Howard Lutnick had been talking with Canadian counterparts all week.
- President Trump said he expects the trade war with Canada to end 'pretty soon.' PM Mark Carney said the US is 'coming closer to our position.'
- A US official told Bloomberg prospects remain unclear because Washington doesn't think Canada is offering enough. A Canadian official described 'limited progress.'
- No terms or timetable have been announced. The Globe and Mail reported the White House wants a breakthrough before the November 3 US midterm elections.
- Current US measures include a 25% tariff on Canadian cars and parts and a Section 338 import ban on some dairy, alcohol and vehicle goods since September 29.
What was said
Over the weekend, the tone in Washington changed.
- Kevin Hassett, director of the White House National Economic Council, told Fox News on October 25 that the US and Canada are "very close to finally having a deal." He said Commerce Secretary Howard Lutnick had been talking with Canadian officials all week, and blamed Canada's recent elections for making earlier talks difficult.
- President Trump said he expects the trade war with Canada to end "pretty soon."
- Prime Minister Mark Carney said the US is "coming closer to our position."
Then came the cold water. A US official told Bloomberg that prospects remain unclear because Washington doesn't believe Canada is offering enough. A Canadian official described "limited progress," and Ottawa's trade minister's office said only that Canada "remains in constructive dialogue."
Why now: the midterms
The US midterm elections are on November 3. The Globe and Mail reported, citing six sources, that the White House wants a breakthrough before the vote.
Election deadlines can push both sides to compromise. They can also produce a thin agreement: a framework or partial tariff relief rather than a full settlement.
Where things stand
Talks between the two countries have been frozen and restarted several times since August. The main US measures now in place:
| Measure | What it covers | Status |
|---|---|---|
| Auto tariff | 25% on Canadian cars and parts | In force; Trump has threatened 50% on January 1 |
| Section 338 import ban | Some dairy, alcohol and vehicle goods | In force since September 29 |
| Steel and aluminum tariffs | Metals | In force |
For background, see our explainer on Canada's auto tariffs and stalled talks.
The damage is showing up in the data. Canada lost 68,000 jobs in September and unemployment rose to 6.5%. The Bank of Canada's own survey showed business confidence slipped after talks collapsed in August. The Bank announces its rate decision today, October 28, at 9:45 a.m. ET.
Who wins if a deal happens
| Group | Why it matters |
|---|---|
| Auto parts makers (Magna, Linamar, Martinrea) | Most exposed to the 25% auto tariff |
| Steel and aluminum | Metals tariffs hit margins and volumes |
| Railways (CN, CPKC) | Cross-border freight volumes |
| Canadian banks | Lower recession risk means fewer loan losses |
| The loonie | Usually rises on good trade news |
| Canadian dairy and spirits | Section 338 ban lifted or eased |
The TSX rose more than 200 points on Tuesday as US stocks rallied, but trade headlines have produced short-lived bounces before.
Who could lose
A deal will almost certainly involve Canadian concessions. Watch for:
- Supply management in dairy, a long-standing US target.
- Digital and media rules affecting US tech companies.
- Defence and border spending commitments.
Any of these could hit specific sectors even as the overall economy benefits.
What it means for you
Don't trade the headline. "Very close" has been said before. Hassett's comments came the same weekend a US official said Canada isn't offering enough.
Check your home bias. If most of your portfolio is in Canadian stocks, trade swings hit you harder. A mix that includes US and international stocks spreads the risk. See why 69% of Canada's exports go to the US.
Watch the loonie. A deal would likely lift the Canadian dollar, which makes US purchases cheaper but reduces the value of US holdings in Canadian dollars.
What to watch next
- Today, 9:45 a.m. ET: Bank of Canada rate decision and Monetary Policy Report.
- November 3: US midterm elections.
- January 1: Trump's threatened increase in the auto tariff to 50%.
Frequently asked questions
Is there a Canada–US trade deal in October 2026?
Not yet. On October 25, 2026, White House adviser Kevin Hassett said the two countries are 'very close' to a deal, and President Trump said he expects the trade war to end 'pretty soon.' But no terms or timetable have been announced, and a US official said Canada hasn't offered enough yet.
What US tariffs does Canada face right now?
The US charges a 25% tariff on Canadian cars and auto parts, and since September 29 has barred certain Canadian dairy, alcohol and motor vehicle goods under Section 338 of the Tariff Act of 1930. Trump has also threatened to raise the auto tariff to 50% on January 1.
Why would a deal happen before November 3?
The US midterm elections are on November 3, 2026. The Globe and Mail reported that the White House is seeking a trade breakthrough before the vote. Deadlines like this can speed talks up, but they can also produce a narrow or temporary agreement.
Which Canadian stocks would benefit from a trade deal?
Companies most exposed to cross-border trade: auto parts makers such as Magna, Linamar and Martinrea, steel and aluminum producers, railways CN and CPKC, and Canadian banks with large US-facing business loans. The Canadian dollar would also likely rise.
What should Canadian investors do while trade talks continue?
Avoid betting your portfolio on a headline. Talks have stalled and restarted several times. A diversified mix of Canadian, US and international stocks reduces the damage if a deal falls through, and the upside is still there if it happens.
Primary sources
- Spokesman-Review (Bloomberg) — Hassett says US-Canada trade talks are 'very close' to deal (Oct. 25, 2026)
- Yahoo News — US-Canada trade deal not as 'close' as portrayed
- BNN Bloomberg — Canadian business and markets news (Oct. 26–27, 2026)
- Department of Finance Canada — Canada's response to U.S. tariffs
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 28, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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