Carney and Trump are holding direct talks to drop tariffs: sources

Prime Minister Mark Carney and U.S. President Donald Trump are having direct discussions to reach a trade deal and lift tariffs, according to sources with knowledge of their talks.

The two leaders agreed even before Canadians went to the polls this spring that they would chart a new economic and security deal, but the Canada-U.S. relationship appeared to hit a snag earlier this week when Trump doubled tariffs on all steel and aluminum imports.

The tariffs, now at 50 per cent, are a further blow to the Canadian industries that are the U.S.’s biggest supplier of the metals.

In response, Carney only said “intensive discussions” were ongoing and that his government was readying reprisals if negotiations with the United States failed. 

Sources, who spoke to CBC News and Radio-Canada on the condition they not be named, now say the two have been talking on the phone about reaching a deal.

WATCH | Canadian exports to U.S. are dropping: 

Canadian exports to U.S. fell more than 15% in April as Trump tariffs hit

Canada posted a $7.1 billion merchandise trade deficit in April — the largest on record — as exports fell sharply in the face of U.S. tariffs. As well, exports to the U.S. fell 15.7 per cent, and imports from the U.S. dropped 10.8 per cent.

There have been no public readouts of the calls. Carney and Trump met publicly last month at the White House, but no direct communication between the leaders had been confirmed since then.

Earlier this week, Radio-Canada reported that Ottawa is hoping to reach an agreement with the Trump administration before the G7 summit — just 10 days from now in Alberta.

Earlier this week, Trump’s envoy to Canada, Ambassador Pete Hoekstra, told a crowd in Toronto the deal “is being settled at the highest levels of the U.S. government with the involvement of the highest elected officials.” 

The story of the direct conversations was first reported by the Globe and Mail.