Democrats have delivered a major political upset in Washington, winning control of both chambers of Congress in the November 2026 midterm elections. For Canadian businesses hoping for relief from Donald Trump’s tariffs, the result offers a potential opening. However, Prime Minister Mark Carney is warning that the political shift does not change who holds the greatest influence over Canada-U.S. trade negotiations.
Speaking in Montreal on November 10, Carney emphasized that Trump’s administration will remain Canada’s primary negotiating partner, regardless of the incoming Democratic majority. His comments highlight a difficult reality for Ottawa: congressional opposition could increase pressure on the White House, but securing a new trade arrangement still requires negotiations with the administration imposing the tariffs.
The stakes extend beyond politics, affecting Canadian manufacturers, exporters, workers and investment decisions across North America.
Carney Makes Clear That the White House Remains Canada’s Main Negotiating Partner
Carney’s position reflects a distinction between political influence and direct negotiating authority. During his November 10 appearance in Montreal, the prime minister said that U.S. trade agreements would continue to be decided primarily by the executive branch over the next several years. Although Democrats are preparing to take control of Congress, the Trump administration remains responsible for conducting negotiations with foreign governments. That makes the White House Canada’s most important counterpart when seeking changes to tariffs, market access and trade commitments.
Carney also confirmed that he had spoken with Trump over the preceding weekend and suggested they could meet again during upcoming international summits. However, he indicated that another face-to-face meeting was not essential for progress. The two leaders have maintained regular communication despite disagreements over trade policy. For Canadian manufacturers and exporters, the distinction matters because political support in Congress does not automatically produce lower tariffs. Businesses need changes that are implemented and recognized by U.S. customs authorities, rather than promises that depend on future legislative negotiations. Ottawa therefore has reasons to maintain direct communication with Trump’s administration while monitoring opportunities created by the election.
Democrats Win Both Chambers, but Their New Power Begins in January
The November 3, 2026, midterm elections delivered sweeping Democratic victories across the United States. The Associated Press projected that Democrats had secured control of both the House of Representatives and the Senate, dramatically changing the political outlook for the remaining two years of Trump’s presidency. Their victories included Senate gains in traditionally Republican states such as Texas and Kansas, along with competitive battlegrounds including Maine and North Carolina. The results demonstrated significant voter dissatisfaction with the administration and created opportunities for Democrats to challenge its economic policies.
However, the new Democratic majorities will not take office until January 2027. Until then, the existing Congress continues operating under its current leadership. Once the transition occurs, Democrats will gain control of congressional committees, legislative priorities and important oversight powers. They could investigate tariff decisions, question administration officials and advance legislation seeking changes to trade policy. Nevertheless, their election victories do not transfer the presidency or eliminate the executive branch’s existing powers. This difference explains why Carney is treating the results as an important political development rather than an immediate breakthrough in Canada’s trade dispute.
Congress Can Challenge Trump’s Tariffs, but Removing Them Is More Complicated
The U.S. Constitution grants Congress authority over foreign commerce, including the ability to legislate on tariffs. However, lawmakers have delegated significant trade powers to presidents through statutes such as the Trade Expansion Act of 1962 and the Trade Act of 1974. Those laws allow the executive branch to impose certain trade restrictions under specified circumstances. Consequently, changing congressional leadership does not automatically cancel tariffs introduced through those authorities. Democrats would need to use legislation, oversight or other available mechanisms to challenge the administration’s policies.
One major obstacle is Trump’s presidential veto. Legislation passed by both chambers generally requires presidential approval to become law. If Trump vetoes a measure removing tariffs, Congress would need a two-thirds majority of members voting in each chamber to override that decision. Democratic election victories alone do not guarantee those numbers, making Republican cooperation essential for an override. Congress could still increase pressure through hearings, investigations and public scrutiny. Those actions might influence negotiations or encourage businesses to lobby for change, but they cannot guarantee an immediate restoration of tariff-free trade. The president retains substantial negotiating leverage even when the opposition controls Congress.
Democratic Leaders Are Already Preparing to Target Tariffs on Canada
Democrats have identified Trump’s trade restrictions on Canada as a potential early target when the new Congress begins work. Senator Ron Wyden, who is positioned to lead the Senate Finance Committee, has highlighted Canadian tariffs as a priority for legislative action. Senate Democratic leader Chuck Schumer introduced legislation in September seeking to repeal several Trump tariffs, including measures affecting Canadian goods. These efforts suggest that Canada could become an important test of whether Democrats can build bipartisan opposition to the administration’s trade policies.
The opposition is not limited to established lawmakers. Michigan senator-elect Abdul El-Sayed has also criticized the trade dispute and expressed a willingness to work with Trump to eliminate tariffs on Canadian goods. On November 6, Carney welcomed efforts to restore freer trade, arguing that reduced barriers would benefit American families facing affordability pressures and workers seeking economic stability. He also acknowledged that he had not discussed possible tariff legislation with leading Democrats. The difference between welcoming congressional initiatives and relying on them is significant. Ottawa can benefit from American political pressure while continuing to negotiate directly with Washington, avoiding a strategy that depends entirely on uncertain legislative outcomes.
Canada Faces a Difficult Choice Between Immediate Relief and a Better Long-Term Deal
The Democratic victories have created a strategic dilemma for Ottawa. Canada could pursue an agreement with the Trump administration that lowers existing tariffs while accepting that some restrictions will remain. Alternatively, the government could maintain its demands for broader tariff relief while waiting to see whether congressional opposition strengthens its negotiating position. Both approaches carry risks. Accepting a limited agreement might provide struggling exporters with immediate relief, but it could also leave Canadian industries facing substantial disadvantages against American competitors. Waiting could produce a better outcome, but it also exposes businesses to further uncertainty.
Carney has not publicly confirmed that the midterm results have changed Canada’s negotiating position. Before the election, Trump suggested the two countries were close to reaching an agreement. Carney subsequently acknowledged that significant disagreements remained, despite progress on certain issues. For a manufacturer considering whether to expand production or postpone an equipment purchase, the difference between partial tariff relief and a comprehensive agreement can be substantial. Ottawa must weigh the economic cost of continued uncertainty against the possibility that stronger political pressure in Washington could eventually produce more favourable trading conditions.
The Future of CUSMA Remains Uncertain Despite the Agreement Still Being in Force
The Canada–United States–Mexico Agreement, known as CUSMA in Canada and USMCA in the United States, entered into force on July 1, 2020. It replaced the North American Free Trade Agreement and established updated rules governing trade, investment, labour, digital commerce and several other areas. The agreement was designed to provide greater certainty for businesses operating across North America. However, its mandatory six-year review became a major source of uncertainty as relations deteriorated. On July 1, 2026, Canada, Mexico and the United States held the first joint review, but Washington declined to extend the agreement in its existing form.
That decision did not immediately terminate CUSMA. The agreement remains in force and is scheduled to continue until 2036 unless an extension is approved or an earlier termination occurs under its provisions. Because all three governments did not agree to extend it, annual reviews must continue until they reach agreement or the arrangement expires. This means Canadian exporters still operate within an established trade framework, although its longer-term future remains unresolved. Significant revisions could also require congressional approval in the United States. Carney’s emphasis on the executive branch therefore concerns the immediate negotiating process, not the complete exclusion of Congress from future trade decisions.
Trump’s Tariffs Have Created Barriers That CUSMA Cannot Always Prevent
One of the most difficult aspects of the dispute is that CUSMA compliance does not guarantee protection from every American tariff. Canadian goods meeting the agreement’s rules of origin can receive preferential treatment, including exemptions from certain duties imposed under Section 301 of U.S. trade law. However, separate restrictions on sectors such as steel, aluminum, automotive products and lumber can still apply. The Trump administration has also used Section 338 of the Tariff Act of 1930 to impose additional 50% duties on specified Canadian products, including some goods that otherwise qualify for preferential trade treatment.
The pressure increased again when U.S. Customs and Border Protection implemented changes effective October 30, 2026. Those changes added 100 tariff classifications to the list facing Section 338 duties while removing 22 classifications. The White House argues that its measures respond to Canadian trade practices it considers discriminatory toward American businesses, particularly in automobiles, dairy and alcoholic beverages. Ottawa disputes those justifications and has introduced retaliatory measures. For Canadian exporters, the resulting system is increasingly complicated, with duties depending on product classifications, applicable legal authorities and exemptions. The central challenge for negotiators is securing relief that businesses can actually use without navigating an unpredictable collection of overlapping trade restrictions.
Canada’s August Negotiating Breakdown Revealed How Much Is at Stake
The latest disagreements extend well beyond tariff percentages. Canada suspended a round of trade negotiations in August after Carney concluded that Washington’s proposed terms were unacceptable. In a public statement on August 22, he explained that Canada had been prepared to consider removing remaining retaliatory tariffs on strategic industries if the United States substantially reduced its restrictions. However, the government was unwilling to accept demands that threatened Canadian sovereignty, domestic industries, French-language protections or cultural policies. Ottawa also rejected terms it considered economically unfair.
By November, Carney indicated that Washington had withdrawn certain demands involving Canadian cultural protections, French-language rules and Canada’s ability to negotiate trade agreements with other countries. That represented progress, but it did not mean the broader dispute had been resolved. The disagreement illustrates why restoring unrestricted trade cannot necessarily be accomplished through a simple exchange of tariff reductions. Decisions involving cultural programming, supply management and national regulatory independence carry political consequences within Canada. Any agreement perceived as sacrificing those protections could face significant domestic opposition. Carney’s negotiating challenge is therefore to improve market access while demonstrating that Canada has retained control over important areas of national policy.
Quebec’s Push for Direct U.S. Engagement Creates Another Challenge for Ottawa
Carney’s comments also exposed tensions over who should represent Canadian economic interests in Washington. On November 10, Quebec Premier and Parti Québécois Leader Paul St-Pierre Plamondon met with Bloc Québécois Leader Yves-François Blanchet to discuss improving trade relations with the United States. St-Pierre Plamondon had sent letters to approximately 60 newly elected American officials in states with important economic connections to Quebec. His objective was to encourage political engagement that could help reduce tariffs and strengthen commercial ties.
Carney responded by emphasizing the importance of having a single negotiator responsible for Canada’s trade arrangements. He maintained that international trade negotiations fall under federal jurisdiction, although provincial governments and political leaders can still communicate with American officials about regional concerns. Quebec’s interest is understandable given its exposure to industries affected by U.S. trade restrictions, particularly aluminum manufacturing. An October assessment from Canada’s Parliamentary Budget Officer found that Quebec’s exports to the United States during the second quarter of 2026 were below their 2024 levels. The disagreement illustrates the difficulty of coordinating a national negotiating strategy when individual provinces face different economic pressures and see different political opportunities.
Ontario’s Auto Industry Shows the Real-World Consequences of the Trade Fight
The dispute has particularly serious implications for Canadian automotive manufacturing. On November 9, Stellantis announced an agreement to sell its idled Brampton, Ontario, assembly plant to Canadian defence manufacturer Roshel. The transaction is expected to close by the end of 2026, subject to regulatory and other conditions. The facility had previously been positioned for future Jeep Compass production, but Stellantis shifted those plans to Illinois amid trade pressures and changing business conditions. More than 2,000 workers had been laid off from the Brampton operation, leaving families facing prolonged uncertainty about their employment prospects.
Carney sharply criticized Stellantis, describing its decision as a betrayal of workers and its obligations to Canada. The company has acknowledged its responsibilities to employees and says it remains prepared to negotiate a settlement with Unifor. Roshel, meanwhile, plans to develop advanced manufacturing operations at the facility, although the future employment arrangements remain uncertain. The situation demonstrates why Canada’s trade negotiations are about more than customs duties. Manufacturing decisions influence supplier contracts, municipal economies, skilled employment and long-term industrial investment. Even if Democrats succeed in increasing pressure against Trump’s tariffs, reversing major factory decisions could prove considerably harder than changing a tariff rate.
Canada’s Economic Future Depends on More Than Who Controls Congress
The scale of the Canada-U.S. economic relationship explains why Ottawa cannot afford to treat the dispute as a short-term political contest. According to U.S. Congressional Research Service data, approximately 72% of Canada’s merchandise exports went to the United States in 2025, while about 46% of Canadian goods imports originated there. The Canadian government estimates that C$3.5 billion in goods and services crossed the border each day that year. Such extensive integration means policy changes can affect manufacturers, agricultural producers, retailers and consumers in both countries.
Economic research also illustrates the potential consequences of continued trade restrictions. In October 2026, Canada’s Parliamentary Budget Officer estimated that trade measures introduced since early 2025 could reduce Canadian real GDP by approximately 1.4% after five years, compared with a pre-tariff baseline, if the measures remain permanent. The Bank of Canada’s business surveys have also identified weaker investment intentions, pressure on costs and adjustments to supply chains following the breakdown in trade talks. These findings help explain Carney’s approach. Democratic control of Congress may eventually improve the political environment for negotiations, but Canadian businesses need practical stability sooner. The central question is whether increasing congressional pressure can convince Trump’s administration to accept a more predictable trading arrangement without forcing Canada to compromise important economic and national interests.
