The U.S. and Canada are moving toward a trade agreement that would lower tariffs and settle a number of long-standing disputes, although the agreement has yet to be finalised.

President Donald Trump said Wednesday the two countries had struck a deal pending completion of paperwork. Canadian Prime Minister Mark Carney said there had been significant progress, but officials on both sides were still negotiating the details.

The tariffs followed Trump’s three-day delay of a planned new 50% tariff on about $20 billion of Canadian imports. The delay gave negotiators more time to reach an agreement before the new tariffs took effect.

U.S. Trade Representative Jamieson Greer said that negotiators had resolved some of the problems that had plagued trade relations between the two countries. The proposed deal, he said, would bolster the North American economy and protect U.S. workers and supply chains.

Trump said Canada had agreed to remove tariffs on U.S. agricultural products, but he did not specify which products or the specific tariff measures involved. Trump was asked whether the U.S. would also cut tariffs on Canadian goods, to which he said they would be cut “a little bit”.

Carney said discussions were moving toward an agreement on what he termed Canada’s most critical strategic sectors. Canadian officials are looking for relief from U.S. tariffs that impact industries like steel, aluminium and automobiles.

Proposals for tariff reductions

The details of the agreement have not been made public. But reports suggest the emerging framework might cut US tariffs on some Canadian steel and aluminium imports by half, from 50% to 25%. The terms could also reduce tariffs on vehicles made in Canada to 15% from 25%.

Negotiators were still discussing the exact size of those cuts and whether quotas or other conditions would apply.

Canada has also come under pressure to remove some retaliatory tariffs on U.S. goods and to open up access for American products in sectors like dairy.

Trade Minister Dominic LeBlanc said Canada’s supply management system for dairy, eggs and poultry would be preserved despite U.S. demands for more access to the Canadian market.

And then there is alcohol. In reaction to earlier U.S. tariffs, some Canadian provinces pulled American alcoholic products from the shelves of government-controlled stores. Carney asked provincial leaders to consider putting U.S. alcohol products back into Canadian markets, Nova Scotia Premier Tim Houston said.

The move could resolve one of Washington’s long-standing grievances over Canadian restrictions on U.S. alcohol imports, but implementation would depend in part on provincial governments.

businesses and pressure from the voters

The talks come amid growing political pressure in Canada. A Leger poll cited in the original story showed that 56 per cent of those polled said that they supported a hardline approach to negotiations with the United States. That number should be checked against the poll’s methodology and field dates before it is released.

Business groups on both sides of the border have urged governments to cut a deal, saying more tariffs would raise costs and disrupt integrated North American supply chains.

Dennis Darby, president of Canadian Manufacturers and Exporters and a member of Carney's trade advisory committee, said businesses were encouraged by the progress but focused on the details of the final agreement.

The immediate aim is to prevent any further upward escalation of tariffs. The two countries are also in broader negotiations over the future of North American trade, including the framework set out by the United States-Mexico-Canada Agreement, or USMCA.

The key terms are still subject to final negotiation and formal documentation for the time being. Until then, it’s uncertain how wide-ranging and durable the emerging agreement will be.