The United States and Canada are finalizing a trade framework that would lower tariffs on Canadian steel and aluminum imports from 50% to 25%, and reduce the top-line tariff on automobiles from 25% to 15%, according to people familiar with the negotiations. Talks continued after President Donald Trump paused a planned 50% levy on roughly $20 billion of Canadian goods for three days, with both sides aiming to reach a deal before a Friday deadline, though details could still change.
The full terms of the agreement remained unclear as of Wednesday afternoon. People who requested anonymity said the reduced steel and aluminum rates would not apply uniformly across all products, and some derivative products containing those metals could face different rates. Canadian steel imports may be subject to a quota system, with higher tariffs on volumes above the quota, while aluminum is not expected to face a quota under current considerations.
A White House official said the agreement with Canada is “being finalized” and that details should be viewed as speculation until an announcement is made. The Office of the U.S. Trade Representative did not immediately comment. The Commerce Department declined to comment. A spokesperson for Canada’s minister in charge of U.S. trade also declined to comment, citing ongoing negotiations.
Asked at the White House on Wednesday whether he would lower tariffs on Canadian metals, Trump said, “We’re looking at that. We may bring some of the tariffs down to the level where other countries are, because Canada was paying a higher tariff.” He added that the agreement would remove Canadian tariffs on U.S. agricultural goods, without providing further details.
Trump announced late Tuesday that he would pause implementation of 50% tariffs on about $20 billion worth of Canadian goods for three days to allow more time for negotiations. Canadian officials have made lowering tariffs on sectors including steel, aluminum, lumber and automobiles a priority in the talks, and a condition for Canada making concessions on U.S. demands.
In Toronto, shares of Canadian steel producer Algoma Steel Group Inc. surged as much as 24%, their biggest intraday gain on record. In the United States, steel product maker Nucor Corp. fell 8.9%, while Century Aluminum Co. dropped 11%.
Manufacturing advocacy groups that support tariffs, including the Coalition for a Prosperous America, have pressed the Trump administration to tie any reduction in aluminum tariffs to traceability requirements aimed at protecting U.S. fabrication. They warn that about 125,000 U.S. jobs are tied to aluminum rolling, drawing and extruding. Canadian imports currently account for roughly half of U.S. aluminum consumption. Canada is the largest source of U.S. aluminum imports, and because U.S. capacity cannot meet domestic demand, much of the tariff cost has been passed on to American buyers.
Canadian Prime Minister Mark Carney said in a statement Wednesday that “significant progress” had been made in the trade talks. He said Canada is moving toward an agreement that reinforces its advantage, including by securing the best terms in its most important strategic sectors and providing greater certainty about the future trading relationship.
