Canada currently faces multiple layers of tariffs, particularly affecting autos, steel, aluminum, and forestry.
After trade negotiations between Ottawa and Washington collapsed in August, the Trump administration imposed an additional 50% tariff on approximately $20 billion (£15 billion) worth of Canadian goods, ranging from dairy to cosmetics and furniture.
The United States also declared a total import ban on motorcycles, whey protein, and alcohol.
Canada retaliated with its own 50% “dollar-for-dollar” tariffs on U.S. products, while most provinces banned the sale of American alcohol.
Trump had previously threatened to escalate the trade conflict further by raising tariffs on sectors including auto manufacturing as of January 1.
Signs emerged before the election that his administration had become more sensitive to the public perception of its tariffs on Canada.
Just days before the vote, Trump told reporters that a trade deal is “very close” after speaking with Prime Minister Mark Carney.
Speaking to reporters on Tuesday evening, Carney said of U.S. negotiators that “they’re asking less and they’re offering more” in recent discussions.
On Wednesday, U.S.-Canada Trade Minister Dominic LeBlanc said the midterm results will not change anything in the short term, dismissing speculation over what the new Congress might do when seated next year as “an interesting discussion at a faculty club luncheon.”
“Our approach will not change and we don’t intend to speculate on the approach being taken by the Americans,” he said.
Pierre Poilievre, leader of Canada’s Conservatives, said on Wednesday that “nobody controls Donald Trump.”
But he said the midterm results show Canada has “massive leverage” because the tariffs are broadly unpopular.
“We’ve got to use that goodwill to pressure for tariff-free trade,” he said.
Trump may indeed feel more pressure to sign a deal with Canada now that American voters have clearly communicated their frustration, said Colin Robertson, a former Canadian diplomat and fellow at the Canadian Global Affairs Institute.
“Will this change Trump’s mind? It might, because he suffered such a beating at the polls,” Robertson said.
He added it remains to be seen how Trump will react to the bruising midterm loss.
Canada has an ideal window between now and January, when new Democratic lawmakers are sworn in, to finalize a deal, Robertson noted.
After that, Trump is likely to be distracted by investigations launched by Democrats into his family, finances, and some members of his administration, Robertson said.
U.S. Trade Representative Jamieson Greer also said earlier this year that he aimed to have interim deals in place with Canada and Mexico under the North American free trade deal—known as USMCA in the United States and CUSMA in Canada—before the end of the year.
While Carney struck a more optimistic tone in recent days regarding Canada-U.S. trade talks, he also told Politico last month that he was prepared to wait for a new American president if necessary to reach a deal.