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Canadian PM Carney announces progress in Canada-US trade deal talks ahead of US midterm elections on November 3.

Canadian Prime Minister Mark Carney has announced progress towards a future trade deal with the United States, which could help ease tensions between the two North American neighbours.

The Sunday announcement came just two days before the November 3 US midterm elections, which will determine control of the US Congress.

“Good conversation with US President Donald Trump on the future of Canada-U.S. trade,” Carney posted on X on Sunday.

Ties between Ottawa and Washington have been strained by an escalating trade war, with Canada and the US imposing billions of dollars in tariffs on each other’s goods in recent months.

“Teams from both countries will be working in the coming weeks to deliver that outcome,” Carney said. “This builds on recent constructive discussions on the outlines of a mutually beneficial trade deal.”

In his second term, Trump has upended global trade by imposing tariffs on many of the US’s allies, including Canada – one of the US’s biggest trading partners.

In August, high-level trade talks between Ottawa and Washington broke down, and Trump imposed a 50 percent levy on $20bn of Canadian goods, or 5.5 percent of its exports. Canada responded with equivalent tariffs on US steel, dairy, appliances, farm equipment, pulp and paper, and electronics.

Trump said last week that he expected a new trade agreement with Canada to be reached “pretty soon”, but offered no details.

The trade tensions with Canada have become an issue in the midterm elections, particularly in Michigan and Maine, where Republican candidates have faced pressure over tariffs that have hurt local businesses.

Canada has sought to diversify its trade options and recently welcomed a European Union offer to become an “associate member”.

Carney praised the proposal’s ambition, describing his goal as a “unique alliance” rather than conventional EU membership.

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