Who blinks first? ‘It probably has to be Carney’ to restart U.S. talks, trade analysts say

U.S. President Donald Trump welcomes Prime Minister Mark Carney outside the West Wing of the White House on October 07, 2025 in Washington, DC. Photo by Anna Moneymaker /Getty Images

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WASHINGTON, D.C. — Over the weekend, Prime Minister Mark Carney positioned Canadian oil and diesel exports as a reliable alternative to U.S. President Donald Trump’s new diesel arrangement with Russia, noting that Canada would “continue to maximise our exports” to the United States. 

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In response, U.S. Ambassador Pete Hoekstra took to Instagram on Tuesday to reject the suggestion that Ottawa’s energy gives it leverage, noting that “we are not going to sit here and be dependent on Canada making a decision.”

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This mischaracterized the situation — Ottawa is not withholding diesel exports from the U.S. — but it underscored that the White House is showing no urgency to return to the negotiating table. Since trade talks between Canada and the U.S. collapsed in August, there have been mentions of informal contact between negotiators and conversations between Carney and Trump, but no formal talks have been held — and Canada-U.S. Trade Minister Dominic LeBlanc has no plans to visit Washington.

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Since Canada has an economy one-twelfth the size of America’s, it has more to lose and less leverage, making this a risky waiting game. Some trade watchers say the two sides need to return talks, and some think the looming threat of higher tariffs on January 1, 2027 — and possibly a U.S.-Mexico preliminary deal — could push Ottawa back to the table. 

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So should Carney be doing everything in his power to get talks back on track as soon as possible?

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“​​The longer it takes, the more harm we’re doing to ourselves,” said Goldy Hyder, president and CEO of the Business Council of Canada.

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“What I hear from business leaders is, ‘sooner rather than later.’ There’s a belief that reality will impose itself and some kind of an agreement that works for all sides can be reached sooner rather than later.”

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But when will there be enough pressure to push the two sides back to the trade talks?

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“I don’t rule out the possibility of something happening between now and even the midterms,” said Hyder, acknowledging that the timing might be tight.

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But some trade analysts say pressure may build to push the sides back into talks shortly after the U.S. elections.

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Christopher Hernandez-Roy, acting director and senior fellow at the Americas Program of CSIS in Washington, thinks there’s potential that the midterms could be pivotal. If the vote results in a Democratic House while Republicans retain control of the Senate, he says there will be more pressure on Canada to negotiate than if the Democrats won a sweep.

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A Democratic House could try initiating legislation to alleviate the trade war, but with a Republican majority in the Senate, any bills of this sort are unlikely to become law. 

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“For Canada, the picture is obviously much better if the Democrats control both houses rather than just the one,” he said.

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Hernandez-Roy acknowledged that Trump will likely still be difficult and tariff-prone, but even if Congress doesn’t get a veto-proof majority, it “has the power of the purse,” he said, referring to legislators’ ability to withhold appropriations to rein in the president.