President Donald Trump and Canadian Prime Minister Mark Carney appear more optimistic about reaching a trade agreement, though uncertainty remains over what it will take to finalize a deal.
The details: Trump said Sunday that his administration has a "concept" of a new deal, while Carney described a positive conversation about the future of trade between the two countries, Reuters reported.
"I spoke to him again yesterday, and we have the concept of a deal that's going to be great for our farmers, great for our country, and we'll be fine for that," Trump told reporters in Dubuque, Iowa.
Carney posted on social media Sunday that the exchange with President Trump "builds on recent constructive discussions on the outlines of a mutually beneficial trade deal."
News of the conversation follows reports last week that negotiations had resumed after weeks of stalled talks, with leaders from both countries remaining at odds over key terms of a potential agreement.
Why it matters: Renewed optimism over a U.S.-Canada trade deal raises the possibility of relief from automotive tariffs, helping to improve vehicle affordability, stabilize pricing, and support inventory planning, depending on the terms of an agreement.
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Between the lines: Sector-specific U.S. tariffs, including those on autos, remain a major sticking point in trade negotiations, with the revival of the Keystone Pipeline project now emerging as a potential component of a deal, according to Reuters, amid high U.S. gas prices.
"They're going to build the Keystone Pipeline," Trump said on Sunday, per Reuters. "They're going to pay for it. … We're going to give them the route, and it's largely been determined."
First proposed in 2008, the pipeline was designed to carry 830,000 barrels of oil per day from northern Alberta's oil sands to the major U.S. storage hub in Cushing, Oklahoma, and onward to Gulf Coast refineries, per Reuters.
A spokesperson for Dominic LeBlanc, Canada's minister responsible for trade with the U.S., declined to comment Sunday on Trump's remarks about reviving the Keystone Pipeline project.
Bottom line: The latest discussions between Trump and Carney suggest renewed momentum toward a trade agreement that could ease pressure on North America's automotive industry. However, with key issues still unresolved, affected dealers should remain cautious in their inventory planning amid continued uncertainty over the outcome of negotiations.
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