Report: US set to lift half of tariffs on select Canadian goods as soon as today

The election campaign is achieving something that trade negotiators failed to secure.

According to the Wall Street Journal, Washington is preparing to remove 50% tariffs on certain Canadian agricultural and forestry products, with a proclamation potentially coming as early as today. The move is politically motivated: Maine Senator Susan Collins, who is locked in a tight race with Democrat Troy Jackson with under two weeks until Election Day, has been pressing for tariff relief.

However, there is little evidence of a broader easing of tensions, as Trump may also raise other tariffs. The USD/CAD pair is down 18 pips at 1.3990 on the day and has not moved on this report.

The specifics:

• The scope and schedule could still shift, according to WSJ's sources.
• The reductions may be offset by higher tariffs on other Canadian goods.
• The White House said any official announcement will come from the administration and described the reports as speculation.
• The USTR declined to comment.

This would be the second revision of the 50% levies. Last month, Washington exempted road salt and cement while adding other products, keeping the total value of affected goods at around $20 billion – roughly 5% of Canadian exports to the US. Collins took credit for that change on the campaign trail. Jackson replied in their debate that Mainers “can’t eat road salt.” Food and lumber are a different matter.

The political implications extend beyond Maine. In Michigan, Republican Senate candidate Mike Rogers has started airing ads that urge Trump to end the trade war with Canada, after previously backing it for months. In New Hampshire, John Sununu has also criticized the Canada tariffs.

For background, Trump imposed the 50% tariffs in late August after last-minute talks collapsed. He used Section 338 of the Tariff Act of 1930, the Smoot-Hawley provision, which had never been used before. Canada retaliated, Trump responded with import bans on some Canadian products, and he has threatened to double tariffs on Canadian autos in January if no deal is reached. A New Jersey food importer filed a lawsuit this week arguing that Section 338 exceeds the administration's authority.

This is not seen as a genuine thaw; it is more of a swap, with the dollar value covered staying around $20 billion and the headline effect for Canada being mostly a reshuffling. At the same time, if Trump wanted real political gains for Republicans before the midterms, he could drop the tariffs altogether and negotiate a deal.