U.S. Commerce Secretary Howard Lutnick has dismissed any possibility of a comprehensive auto trade deal with Canada, according to multiple sources who were present when he made the comments Wednesday at the Eurasia Group’s Canada-U.S. Summit in Toronto.
Speaking under Chatham House Rules, Lutnick said the United States may continue purchasing Canadian auto parts, “but that’s about it,” signaling little interest in negotiating broader concessions for Canada’s auto sector. His remarks came just one day after Prime Minister Mark Carney’s second in-person meeting with U.S. President Donald Trump at the White House.
The comments deal a blow to Ottawa’s hopes of securing progress on the automotive front amid escalating trade tensions. Since April, the U.S. has imposed a 25 per cent tariff on all foreign-made autos, including Canadian vehicles. For exports that comply with the Canada-U.S.-Mexico Agreement (CUSMA), the tariff applies to non-American components. Canadian exports that don’t meet CUSMA rules face additional tariffs, alongside existing levies on steel, aluminum, and copper. Canada has responded with its own countermeasures, including a 25 per cent tariff on non-CUSMA autos.
According to sources, Lutnick added that “Canada should come second” to the U.S. when it comes to auto manufacturing priorities. His stance contrasts sharply with President Trump’s more optimistic tone. Speaking to reporters in the Oval Office on Tuesday, Trump said, “It’s a tough situation, because we want to make our cars here. At the same time, we want Canada to do well making cars. So, we’re working on formulas, and I think we’ll get there.”
Canada-U.S. Trade Minister Dominic LeBlanc characterized Tuesday’s meeting as “successful,” “positive,” and “effective,” though he offered no concrete outcomes. Ontario Premier Doug Ford reacted sharply to Lutnick’s remarks, warning the auto sector to “be prepared.” He described the comments as “a massive threat,” adding, “(Lutnick would) only say it if the president gave him the green light.” Ford also referenced the longstanding Auto Pact, saying, “You can’t unscramble an egg, you have to make the omelette larger.”
In a notable aside, Lutnick also suggested that Canada and the U.S. should bypass Mexico entirely and renegotiate a new bilateral trade deal. Both countries are preparing for CUSMA’s scheduled review next year. However, Carney signaled last month in Mexico City that he has no interest in excluding Mexico, stating, “CUSMA is strength together. It’s strength of the three countries together.”
The auto remarks came as energy cooperation again emerged as a bargaining chip in U.S.-Canada trade talks. A source familiar with the discussions confirmed that Carney raised the abandoned Keystone XL pipeline during Tuesday’s White House meeting as part of a broader pitch to ease steel and aluminum tariffs. Trump was reportedly receptive to the idea of exploring sectoral linkages.
South Bow, the company that owns the Keystone pipeline network, said it is “not privy” to government talks but remains supportive of efforts to expand crude transportation capacity. The controversial Keystone XL project has had a long and tumultuous history: first proposed under President George W. Bush, rejected by Barack Obama, revived by Trump, and cancelled by Joe Biden.