Carney Signals Extended Deadlock on U.S. Trade Talks, Dimming Year-End Deal Hopes

OTTAWA — Prime Minister Mark Carney confirmed Wednesday that formal trade negotiations with the United States remain suspended, effectively extinguishing hopes for a tariff breakthrough before pending November and December deadlines. The admission points to a protracted stalemate between Ottawa and Washington, leaving Canadian industries exposed to elevated U.S. duties well into 2026.

Speaking alongside new federal support measures for the manufacturing sector, Carney stated explicitly that discussions with the Trump administration have "not restarted." The Prime Minister also clarified that Canada’s newly announced tariffs on steel derivatives are strictly domestic safeguards aimed at stabilizing the local market against dumping, rather than retaliatory measures intended to "put pressure on the U.S."

The confirmation of stalled talks provides a bearish signal for investors monitoring the likelihood of a bilateral deal by the imminent November 30 and December 31 market horizons.

Diplomatic channels have been effectively frozen since October, when President Trump abruptly halted negotiations citing a controversial advertising campaign by the Ontario provincial government. Friction intensified earlier this week following Carney’s comments at the G20 Summit in Johannesburg, where he initially dismissed questions about his engagement with the U.S. President with the phrase, "Who cares?" While Carney has since walked back the remark as a "poor choice of words," the diplomatic chill is palpable.

In the absence of a negotiated settlement, the economic drag on Canadian exporters is compounding. Since the start of the current U.S. administration, tariffs on Canadian steel and aluminum have climbed to 50%, alongside significant hikes in softwood lumber duties. These barriers have reordered the continental economy; in 2025, Mexico overtook Canada as the top buyer of U.S. goods for the first time in nearly 30 years.

The Liberal government is now pivoting toward domestic mitigation rather than immediate re-engagement. The measures announced Wednesday include restricting steel imports from non-free trade nations and providing subsidies to reduce rail freight costs for domestic producers.

With the Prime Minister asserting there is no "burning issue" requiring immediate contact with the White House, and the USMCA review not scheduled until 2026, the window for an official agreement to lift or modify tariffs by year-end has likely closed.