Canada–US talks resume as APEC nears
A deal is “being worked on”. The 50% duty at the Canadian border is still being paid
Canada and the United States have spoken about a trade deal “within the past few days”. That is what US Trade Representative Jamieson Greer told CNBC’s “Squawk Pod” on Thursday 12 November, as reported by BNN Bloomberg. He said President Donald Trump and Prime Minister Mark Carney speak regularly. He would not put a date on a deal.
“The substance of the deal is more important than a timeline,” Greer said. “But we certainly are working on it.”
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Our view is simple. This is a sign of life, not a sign of relief. Greer used the same interview to say the administration is “going to keep taking trade actions as necessary”. Until a new rate appears in a signed proclamation with an effective date, the 50% duty on a wide list of Canadian goods is the number to quote. Forwarders and customs brokers who start pricing in a deal now will be explaining surprise duty bills in January.
What is actually being charged today
The tariff at the centre of this is unusual. It rests on Section 338 of the Tariff Act of 1930. The law lets the president impose tariffs of up to 50% on any country he finds discriminates against US commerce. Law firm Covington says the statute “has effectively remained unused for more than 75 years”. This is the first time in modern history it has been used to impose tariffs.
Trump signed three proclamations on 20 July 2026. They answered Canadian measures on motor vehicles, dairy and alcoholic drinks. The duties were due on 19 August and took effect on 22 August, PwC says. They cover far more than those three sectors. Covington lists chemicals, prepared foods and beverages, plastics, metal items, machinery, cosmetics, wood and paper products, industrial equipment, and electronics and telecoms products. PwC’s list adds lumber, paper and textiles.
Three features matter most for anyone moving freight south across the border.
First, the 50% stacks. It is charged on top of the normal “Column 1” rate (the standard US import duty), anti-dumping and countervailing duties (penalty duties on goods judged unfairly cheap or subsidised) and Section 301 tariffs. PwC notes that where a normal duty also applies, the total can go above 50%.
Second, CUSMA does not help. CUSMA is the Canada–US–Mexico Agreement, known in the US as USMCA. Normally, goods that meet its origin rules cross duty-free. Not here. Covington says “there is no exception for goods that qualify as originating” under the agreement, apart from certain passenger vehicle parts. PwC says the same.
Third, there is no grace period for cargo in motion. Covington: “There is no ‘on the water’ or in-transit exception.”
There are carve-outs. PwC lists energy, potash and critical minerals. It also lists fish, semiconductors, patented drugs, commercial vehicles, civil aircraft and wood products already under anti-dumping or countervailing duties. Goods already hit by Section 232 tariffs (the national-security tariffs on steel, aluminium, copper and some cars) are also excluded.
How big is the hit? Al Jazeera, citing AFP, AP and Reuters, says Trump imposed “a 50 percent levy on $20bn of Canadian goods, or 5.5 percent of its exports”. That is a minority of cross-border trade. But it falls on the mixed, consumer and industrial freight that forwarders handle every day, not on the pipeline oil and potash trains that are exempt.
Canada hit back. Carney announced on 25 August that Canada would respond “dollar-for-dollar”, Covington reports. Canada’s tariffs of 15%, 25% or 50% on more than 600 product categories were set to start on 8 September. Covington puts the total at about $27.6bn of US goods. The targets include steel and aluminium, dairy, textiles and apparel, appliances, farm equipment, pulp and paper, and electronics. So northbound freight carries duty risk too.
Why the talk has picked up now
Talks broke down in August, according to Al Jazeera. They restarted in public on 1 November, two days before the US midterm elections. Carney posted that he had a “Good conversation” with Trump. He wrote: “Teams from both countries will be working in the coming weeks to deliver that outcome.” He also said it built on “recent constructive discussions on the outlines of a mutually beneficial trade deal.”
Then the midterms changed the picture in Washington. BNN Bloomberg reports that Republicans lost both the House and the Senate. It links the result partly to tariffs it says have fuelled inflation. Democrats take control of both chambers in January. Michigan Senator-elect Abdul El-Sayed, a Democrat, called the tariff war with Canada “insane” and said he would be willing to help end it. Democrats could bring in tariff legislation. Greer said he looks forward to working with Congress on tariffs.
US Ambassador to Canada Pete Hoekstra has predicted a deal could come before the end of 2026, BNN Bloomberg says.
Our reading is that the incentives for a deal are stronger than they were in the summer. Washington now has a Congress about to turn hostile on tariffs. Ottawa has exporters paying 50%. But “stronger incentives” is a long way from new rates at the border. Greer framed the US goal as a deal that protects American supply chains. He also said Canada “would love to go back to how things used to be”. In our view, that means the US is not offering a return to the old terms. It wants something new in exchange.
The China thread running through Shenzhen
The next big date is the APEC leaders’ summit in Shenzhen, China, on 18–19 November. Two meetings there bear on North American freight.
Carney is due to meet Chinese President Xi Jinping, the Rio Times reports. He has said he will raise foreign interference. Tariffs, trade and Chinese investment are also expected on the agenda. China’s 25% tariffs on Canadian pork, shrimp and geoduck clams remain in place, the Rio Times says. Beijing has not yet accepted Carney’s new ambassador.
Trump also expects to meet Xi there. Ahead of that, Treasury Secretary Scott Bessent set out the US line at a gala hosted by the National Committee on U.S.-China Relations on Tuesday 10 November, The Hill reports. He said “our objective is to de-risk, not to decouple”. He said “the United States must produce more of what we consume, while China must consume more of what it produces.” He added: “After decades of imbalance, we are restoring a spirit of reciprocity for the benefit of both of our peoples.”
The US–China truce now runs to 10 January 2027, according to The Hill. In September both sides agreed to lower tariffs on $30bn of products, and China’s rare-earth export controls stay suspended. The Hill also cites Census Bureau data showing the US goods deficit with China fell to $202.7bn last year, a 20-year low.
Here is why this matters for the Canada file, in our view. “Protect supply chains” and “de-risk” are the same idea from two officials. A Canadian prime minister sitting down with Xi in Shenzhen, while trying to close a deal with Washington, will be watched closely. We expect any US–Canada text to include commitments on Chinese content, investment screening or transshipment (goods routed through one country to dodge tariffs on another). Those clauses take time to draft. That is another reason a quick fix is unlikely.
What this means for forwarders and shippers
Keep quoting 50% on covered lines. Check every Canadian-origin shipment against the annex lists in the 20 July proclamations. Do not assume a CUSMA certificate of origin removes the duty. It does not.
Watch the effective-date language, not the headlines. When a deal comes, the relief will depend on the wording. The questions are which goods it covers, when it starts, and whether goods already in transit qualify. The original tariffs gave no in-transit break. A rollback may not either. Shippers holding stock in Canadian warehouses for the US market should not release it on the strength of a press conference.
Do not forget northbound. Canada’s counter-tariffs apply to US steel, aluminium, dairy, appliances, farm equipment, pulp and paper, and electronics. A US–Canada deal would almost certainly unwind both sides at once. Until then, US exporters into Canada can face duty at 15%, 25% or 50%.
Expect volume to stay lumpy. When a deal is announced, importers will want to time entries around the effective date. That means short bursts of demand for cross-border trucking and rail, and for customs brokerage capacity. Book space with carriers early, and have entry filings prepared so they can go the day relief starts.
Keep an eye on Shenzhen. If Carney and Xi announce anything on China’s 25% tariffs on Canadian pork and seafood, that matters for reefer (refrigerated container) bookings out of Canada’s Pacific ports. If Trump and Xi extend the 10 January truce, transpacific shippers routing through Canada keep their current costs. If the truce frays, the US will look harder at Canadian ports as a back door, and compliance checks on Canadian-routed Chinese goods will tighten.
Our call
We think the 50% Section 338 tariffs will still apply to covered Canadian goods on 31 December 2026. If a deal is announced before then, we expect it to be a framework with tariff cuts taking effect no earlier than the first quarter of 2027. We also expect it to include supply-chain clauses aimed at China. That is our forecast, not a report. The thing that would prove us wrong is a signed proclamation, dated before New Year, that lowers the 50% rate.
Sources
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