Oct 27, 2026
“The U.S. is coming closer to our position.” That was Prime Minister Mark Carney’s read on Canada-U.S. trade talks on Oct. 26, after two months of targeted tariffs between the two neighbouring nations.
However, that optimism came with a caveat. When asked whether U.S. President Donald Trump would “sign in pen” this time, after Carney warned in August that Washington’s signature was sometimes “written in pencil,” the prime minister replied: “I don’t know that.”
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That’s the tension Canadian households now live with: real progress but no guarantees. A deal could ease prices on some U.S.-made goods and alleviate some pressure on tariff-hit industries. Yet planning your budget, mortgage or portfolio around the next headline is risky when the rules can change within a week.
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Where do Canada-U.S. trade talks stand right now?
Trade talks broke down late summer, with the U.S. imposing a 50% tariff on $27.6 billion of Canadian goods on Aug. 22. Ottawa responded dollar for dollar, with counter-tariffs of 15%, 25% and 50% on $27.6 billion of U.S. goods that took effect Sept. 8.
Last week, things shifted slightly. Trump signed a proclamation on Oct. 23 removing plywood sheets, some paper products, certain machinery and refrigeration equipment, and certain packing crates and boxes from the 50% tariff list, effective Oct. 30. But the same order added other Canadian products, including carpets, paints, shampoos, air conditioners, chest freezers and canoes.
Carney says Canada will only sign a deal that respects its red lines — which was the reason Ottawa initially walked away from a U.S. offer in August, according to The Globe and Mail. Reporting from CTV News links part of the White House’s renewed interest in a deal to Trump’s political vulnerabilities ahead of the U.S. midterm elections.
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What’s actually driving up your bills
Under Canada’s counter-tariffs, U.S.-made furniture and clothing face a 50% levy, while appliances and most cheeses face 25%. However, these apply specifically to U.S.-made products. Similar items that originate elsewhere, or in Canada, do not face the same surcharge. If a deal rolled those back, prices on tariffed U.S.-made products could ease. Still, retailers aren’t obligated to pass savings on right away.
It’s also worth knowing what’s actually driving up your bills. Inflation reached 3.1% in September, led by a 27.8% year-over-year jump in gasoline prices as crude oil surged according to Statistics Canada. Excluding gasoline, prices rose 2.2%, which is close to the 2% target set by the Bank of Canada (BoC). A trade deal alone won’t ease the squeeze at the pump.
Could the trade war affect your mortgage this week?
It might. The BoC announces its next rate decision on Wednesday, Oct. 28. In a Reuters poll conducted between Oct. 21 and 23, 19 of 34 economists predicted a quarter-point hike to 2.50%, which would be the BoC’s first increase since July 2023.
Oil is the primary driver. On Oct. 17, BoC Governor Tiff Macklem said the bank’s updated inflation outlook would likely be “quite a bit higher” than its July forecast. But trade is also an important factor. The BoC’s latest Business Outlook Survey found firms’ inflation expectations rose after Canada-U.S. trade talks broke down in August.
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Variable-rate borrowers and anyone with a home equity line of credit (HELOC) would feel a hike quickly. For example, a 0.25 percentage-point increase on a $300,000 variable-rate balance adds roughly $750 a year in interest, or about $63 a month. The exact amount depends on both your lender and mortgage terms.
Should you adjust your investments on trade news?
Trade headlines have fluctuated before. On Aug. 18, Trump paused the 50% tariffs for three days, saying the two countries had a deal “subject to the finalization of documents.” Talks collapsed days later, and the tariffs took effect Aug. 22.
For most Canadians, a diversified registered retirement savings plan (RRSP) or tax-free savings account (TFSA) built for the long term doesn’t need a trade-war overhaul — it needs to stay aligned with your future goals and time horizon. Rebalance on your regular schedule, not on breaking news.
What to do now
Whether or not a deal lands soon, these steps hold up:
- Delay any non-urgent, big-ticket U.S.-made purchases such as furniture or appliances, but don’t put off buying essentials while waiting for a potential deal
- Check the country of origin before you buy, since non-U.S. alternatives aren’t subject to Canada’s counter-tariffs
- Review your payments after Wednesday’s BoC announcement and ask your lender whether locking in suits your situation if you have a variable-rate mortgage or HELOC
- If you work in a tariff-hit industry, build your emergency fund and look into any applicable federal supports for affected workers and businesses
- Keep enough cash on hand so you aren’t forced to sell investments during a dip
The smartest approach is to plan for two outcomes: a deal that eases some prices, or a fresh round of tariffs that pushes others higher.
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Writer and editor based in Toronto with experience in personal finance, insurance, arts and culture and branded content.
