Prime Minister Mark Carney says Canada is making headway on terms in the USMCA that would leave a path to profitability for domestic auto production.Chris Helgren/Reuters
Prime Minister Mark Carney said Canada is making headway in negotiations with the United States that would “preserve the long-term viability” of Canada’s auto sector.
He called talks over autos “one of the most challenging issues in negotiations” with Washington.
Speaking to reporters during a trip to Manila, where he announced Canada had wrapped up talks on a trade agreement with the Philippines, Mr. Carney said that he won’t accept a deal with the United States that would kill the Canadian auto sector.
He said he had a “long, substantive conversation” with U.S. President Donald Trump just before leaving for his current trip which has taken him from Dublin to Asia for three summits.
He said White House Chief of Staff Stephen Miller and Jamieson Greer, the United States Trade Representative, among others, were on the call.
Mr. Carney said he sees a one-on-one deal with the United States to scale back the U.S. tariffs that currently cover steel, aluminum and autos.
“We are making progress. There is the possibility of a deal, a bilateral deal, but we’re not yet there,” Mr. Carney said.
Auto sector at odds over approach to tariff negotiations as Ottawa pursues deal with U.S.
He said the sustainability of the auto industry, which is premised on continued market access to the United States, is non-negotiable.
“This government will not settle for a deal with the United States that does not is not consistent with a viable Canadian auto sector,” Mr. Carney said.
“There’s lots of people who think that we should just go and take whatever deal,” he said.
He said Canada is making headway on terms in the USMCA that would leave a path to profitability for Canadian auto production.
Mr. Carney said Canada is making gains on terms for autos, suggesting this is because the competitiveness of Canadian auto sector benefits the U.S. industry.
“This is one of the fundamental issues in our trade negotiation, and we are making progress towards that. Not least because the longer-term competitiveness of the U.S. auto sector is determined by many factors, including the degree of integration with the Canadian auto sector,” the Prime Minister said.
“It’s not the only factor, but it’s one of them.”
He said the North American auto industry as a whole faces significant competitive challenges because of the speed of change and the shift to electric vehicles.
Mr. Carney said this will require “big investment” to keep the industry competitive.
The Trump administration’s 25-per-cent tariff on Canadian-made autos – minus a carve-out for U.S. parts in the vehicles – has put severe pressure on an industry that typically exports nearly 90 per cent of production to the United States. The value of Canadian passenger car and light truck exports to the U.S. tumbled nearly 12 per cent from 2024 to 2025, and exports are tracking even lower in 2026.
In August, Washington offered to lower the headline tariff rate to 15 per cent, as part of a broader trade deal that would have reduced the sectoral duties, known as Section 232 tariffs, on several key Canadian industries in return for concessions from Ottawa. The U.S. parts carve-out would have been maintained, but the tariff relief would not have been extended to medium- and heavy-duty trucks.
Many in the Canadian auto industry balked at the proposal and applauded Prime Minister Mark Carney’s decision to walk away from negotiations. However, that choice has left an unsustainable status quo for the sector.
Mr. Carney’s government is facing pressure to save auto jobs even as multinational auto maker Stellantis is trying to sell its idled Brampton, Ont. Plant to an armoured vehicle manufacturer.
Industry Ministery Mélanie Joly said Friday that Ottawa and the Ontario government, along with the union representing workers at the plant, have put “an aggressive package” in front of Stellantis, adding the parties remain “in solution mode to prevent the sale” of the idled factory to defence contractor Roshel Inc.
Mr. Carney declined to offer details of this package. “The details of that and the implications of that will come out in due course,” he said.
With files from Mark Rendell and Jason Kirby