U.S. President Donald Trump said on Tuesday that the United States and Canada are “working on a formula” to resolve ongoing tariff disputes involving steel, aluminum, and automobiles — signaling a potential breakthrough in strained trade relations.
The remarks came during a meeting with Canadian Prime Minister Mark Carney in the Oval Office, where both leaders discussed the future of a trading relationship worth an estimated $900 billion annually.
“I think we can get there,” Trump said, referring to a possible deal. “He wants to make cars, we want to make cars, and we’re in competition. The advantage we have is this massive market.”
Trump described the differences between the two nations as “natural conflicts” driven by shared industrial ambitions, adding that the two sides are “in talks to find common ground.” The U.S. president also alluded to his controversial earlier suggestion that Canada could become the 51st U.S. state, a comment widely rejected north of the border.
“That’s why I keep mentioning one way to solve that problem is a very easy way,” Trump said, smiling, as Carney looked on.
Trade Tensions and Economic Stakes
The U.S. and Canada have long maintained one of the closest economic partnerships in the world, but Trump’s administration has repeatedly raised tariffs on Canadian steel, aluminum, and automotive imports, citing national security concerns.
Canada remains the largest foreign buyer of U.S.-made vehicles and also exports most of its own automotive production south of the border. Tariff increases have rattled manufacturers on both sides, threatening supply chains that depend on open trade under the CUSMA (Canada-U.S.-Mexico Agreement) framework.
Prime Minister Mark Carney, the former governor of both the Bank of Canada and the Bank of England, took office earlier this year after winning an election on a platform promising a “modernized trade and security deal” with the United States.
However, since his election in April, Trump has expanded tariffs rather than easing them, complicating Carney’s efforts to rebuild trust and economic predictability.
Path Forward
While neither leader announced specific terms for a new deal, both signaled a willingness to keep negotiations active in the coming weeks.
“We’re competitors, but we’re also partners,” Carney said briefly after the meeting. “Our focus is on creating stability for workers and businesses in both countries.”
The conversation underscores how intertwined the two economies remain — and how a resolution to the tariff conflict could shape North American trade for years to come.
