Tuesday, October 27, 2026
The news that moves freight
Ocean Oct 27, 2026 · 7 min read

US and Canada talk steel and auto tariff relief

Steel and autos are on the table. The 30 October list is not. On 26 October Reuters reported, citing two US and four Canadian sources, that Washington and Ottawa are working on a deal to ease US tariffs of up to 50% on Canadian steel and 25% on autos. Our view: this is a narrow sector deal at best. A Canadian industry source told Reuters: “my sense is it’ll be a narrowed deal, if it even happens.” US sources say Washington still wants more concessions. The 50% duty on a named product list still changes at 12:01am ET on 30 October. Our call: that 50% duty is still in force on 31 December 2026.

A narrow metals-and-cars deal is the best case. Price the rest of Canada at 50%. On 26 October Reuters reported that the US and Canada are working on a deal to ease US tariffs on Canadian steel and autos. The report cites two US sources and four Canadian sources. The duties in play are up to 50% on Canadian steel and 25% on Canadian autos. One Canadian source said a deal was possible before the 3 November US midterm elections.

That gives the talks a named scope. The earlier public signal was White House economic adviser Kevin Hassett suggesting the two sides were close, AP notes. Now we know what “close” would cover.

Our view is simple. If a deal comes, it will be a sector deal on metals and cars. It will not touch the separate 50% duty on a named list of other Canadian goods. Forwarders should plan for relief on one narrow set of lanes and for no change on the rest.

What the reports say

The tariffs in the Reuters story are Section 232 duties. Section 232 is a US law that lets the president put tariffs on imports on national-security grounds. The Commerce Department runs it. That is why Reuters names Commerce Secretary Howard Lutnick as central to the talks. It reports that he is in regular contact with Dominic LeBlanc, the Canadian minister responsible for Canada-US trade.

The Reuters sources do not describe a broad agreement. A Canadian industry source said: “If it happens, it’ll happen fast. But my sense is it’ll be a narrowed deal, if it even happens.” US sources said the Trump administration wanted Canada to make further concessions.

LeBlanc’s office gave Reuters a cautious line: “Canada remains in constructive dialogue with our U.S. counterparts on a range of priorities.”

Carney spoke on the record the same day. AP reports he described a “slight, slight intensification” of discussions, but said Canada’s negotiating position had not changed. His framing of any progress was pointed: “To the extent any progress has been made, it’s because the U.S. is coming closer to our position.”

AP also reports that Trump told a Michigan campaign rally that Canada was “willing to give us anything at this moment”. So each side is telling voters the other one is moving. That is a sign of a deal being sold, not a deal being signed.

Reuters adds a political detail. It reports that just 32% of Americans approve of Trump, and that tariffs on Canadian imports have become a political liability for him. AP says tariffs are a factor in closely watched Senate races, including Michigan’s, and that Maine Sen. Susan Collins has pushed for easing tariffs on Canadian goods. Michigan is car country. A steel and auto deal is the one that plays there.

The two tariff tracks

Forwarders need to keep two separate sets of duties in their heads.

The first is Section 232. It covers steel, aluminium and autos. Reuters puts steel at up to 50% and autos at 25%. Reuters also restates Trump’s plan to raise tariffs on steel and auto imports from Canada to 50% from 1 January 2027. Since steel is already at up to 50%, our reading is that the bigger jump would land on autos and auto parts, from 25% to 50%. That date is now part of the negotiation. Removing or delaying it may be the cheapest thing Washington can offer.

The second track is a separate 50% duty on a named list of Canadian products, applied under Section 338 of US trade law. AP reports that after talks collapsed in August, Trump imposed 50% tariffs on roughly $20 billion in Canadian goods. That list changes this week. RVIA, which tracks tariffs for the US recreational vehicle industry, reports that a 23 October proclamation takes effect at 12:01am ET on 30 October. It removes 22 HTS codes and adds 100. HTS codes are the Harmonized Tariff Schedule numbers that identify a product on a customs entry. Added items include certain flooring and carpets, sealants and coatings, wood panels and joinery, and air-conditioning units, RVIA says.

Two details from RVIA matter for entries. These duties stack on top of Section 232 tariffs. And they apply “to all goods regardless of a product’s USMCA eligibility.” USMCA is the US-Mexico-Canada trade agreement. In the past, qualifying for it was the main way to keep Canadian goods duty-free. On this list, it does not help.

Canada has hit back on its own side of the border. Law firm Blakes reports that Canada imposed counter-tariffs on C$27.6 billion of US imports from 8 September, across more than 600 product classifications. Rates are 50%, 25% or 15%. Existing Canadian counter-tariffs on US steel and aluminium rose from 25% to 50%, Blakes says, and “Other existing counter-tariffs, including against U.S. autos, will continue to apply.” So any metals and autos deal would most likely come with Canadian cuts on the same goods. Northbound freight is in play too, not just southbound.

What happened last time

There is a precedent for a fast, narrow metals deal between these two countries. On 17 May 2019 Canada and the US issued a joint statement on Section 232 duties on steel and aluminium. Both sides agreed to remove the US tariffs and Canada’s retaliatory tariffs “no later than two days from the issuance of this statement.”

Relief followed within days. Expeditors, the logistics group, reported that “U.S. Customs and Border Protection implemented the lifting of the tariffs on May 20, 2019.”

The 2019 deal was also conditional. The joint statement set up a process to monitor steel and aluminium trade. If imports surged “meaningfully beyond historic volumes of trade,” the importing country could ask for talks and then reimpose duties of 25% on steel or 10% on aluminium. Both sides also agreed to act against dumped or subsidised metal and to stop metal from other countries being shipped through.

That is the template we would expect again. It was quick, it covered one sector, and it came with a snap-back clause. The Canadian source’s phrase, “it’ll happen fast,” fits that pattern. So does the word “narrowed.”

What this means for forwarders

First, separate your Canadian files into two piles. Steel, aluminium, autos and auto parts sit in the pile that could change at short notice. Everything on the Section 338 list sits in the pile that will not, at least on this news.

Second, do not hold freight for a deal. In 2019, relief came three days after the statement. If that repeats, a shipment held for a week gains little and costs storage and missed sailings. Move it, and make sure the customer knows who carries the duty if rates change mid-transit.

Third, check the 30 October list against every open Canadian booking now. The change takes effect at 12:01am ET that day. The 100 added codes include building products and air-conditioning units. Those are seasonal, project-driven goods. A shipper who expected USMCA treatment will not get it.

Fourth, expect any deal to come with conditions. A surge clause, a quota or a melt-and-pour test (where the metal was first made) all mean more paperwork at entry. Brokers on cross-border steel and auto-parts lanes should expect to prove origin in more detail, not less.

Fifth, watch the 1 January 2027 date. If a deal cancels or delays the auto increase to 50%, the rush to land Canadian auto parts before year-end eases. If no deal comes, expect importers to pull those moves into November and December. That would tighten truck and rail capacity on the Detroit–Windsor and Buffalo–Fort Erie corridors in the busiest weeks of the year. That is our expectation, not a reported forecast.

Our call

We don’t expect a signed US–Canada deal before the 3 November midterms. Both governments are talking up their own side’s strength in public. The US still wants more, per Reuters. Carney says Canada has not moved. That is not the sound of a text being finalised.

Our prediction: the 50% Section 338 duty is still in force on Canadian goods on 31 December 2026. We also predict that the product list is amended at least once more before then, by a proclamation adding or removing named products.

If a deal does come, we expect it to start with sector cuts on autos, steel and aluminium. We don’t expect it to scrap the Section 338 list in one go. The Reuters report supports that. Section 232 steel and auto tariffs are the subject of the talks, and the people closest to them describe a narrowed deal.

The practical upshot: book Canadian freight this quarter on the 30 October list at 50%, and treat any steel or auto relief as an upside you can act on within days.

Sources