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Trade War Oct 26, 2026: US and Canada Work on Steel, Auto Tariff Deal

Trade war news: the US and Canada work on a steel and auto tariff deal, Mexico says no deal yet, and tariffs weigh on Republicans before the midterms.

ByPeter
Trade war map marking Washington, Ottawa, Mexico City, Brazil and Beijing, with shipping chokepoints, Oct 26, 2026
Lead map: places named in this update, with footnote numbers in each label; shipping chokepoints are shown for reference. Map: Peter's World; data: Natural Earth

Trade War Update

October 26, 2026 · imbalances and dependence

  • Up to 50%US Section 232 tariff on Canadian steel [14]
  • 25%US Section 232 tariff on Canadian autos As above
  • 50%Planned rate on Canadian steel and autos from January 1, 2027 As above
  • 50% and 25%, with exceptionsUS tariffs on Mexican steel and aluminum, and on some vehicles [15]

Key Takeaways: 4 things to know

  1. The United States and Canada are working on a deal to ease steel and auto tariffs, Reuters reported, citing six sources (see US-Canada Steel and Auto Talks).
  2. Mexico’s president said no tariff deal has been reached yet, though talks on steel, aluminum and autos are very close (see Mexico Talks).
  3. Forty percent of Republicans expect tariffs to help the country, down from 49% in January, according to Pew Research cited by Axios (see Domestic Affairs).
  4. The Commerce Department kept duties on small Chinese engines in a notice published October 26 (see Analysis).
Report detailsTrade War Update, Monday, October 26, 2026 (Trade Lenses v2) · Data cutoff Oct 26, ~5:00 PM ETDetails
  • Publisher: Peter’s World
  • Edition: Trade War Update, Monday, October 26, 2026 (Trade Lenses v2)
  • Coverage window: Oct 25, 2026, ~7:30 AM ET to Oct 26, 2026, ~5:00 PM ET
  • Data cutoff: Oct 26, 2026, ~5:00 PM ET
  • Times: ET unless stated
  • Sources: war.gov checked first, then the Federal Register, foreign governments and wire reports
Trade war map marking Washington, Ottawa, Mexico City, Brazil and Beijing, with shipping chokepoints, Oct 26, 2026
Lead map: places named in this update, with footnote numbers in each label; shipping chokepoints are shown for reference. Map: Peter’s World; data: Natural Earth

Key Numbers

Key figures by industry

FigureValueSource
Tariff rates in play
US Section 232 tariff on Canadian steelUp to 50%[14]
US Section 232 tariff on Canadian autos25%As above
Planned rate on Canadian steel and autos from January 1, 202750%As above
US tariffs on Mexican steel and aluminum, and on some vehicles50% and 25%, with exceptions[15]
Public opinion and investment
Republicans expecting a mostly positive effect from tariffs, October 202640% (49% in January)[16]
Americans saying Trump has gone too far on new tariffs (AP-NORC, October)64%As above
Announced Audi US factory investment$4.2 billion; 4,500 expected jobsAs above

This trade war news update for October 26, 2026, covers reported US-Canada talks on easing steel and auto tariffs, Mexico’s statement that no deal has been reached yet, and new signs that tariffs are a midterm issue for Republicans.[1] It follows the October 25 trade war update; see the War Room and the Trade War News Hub.

US-Canada Steel and Auto Talks

The United States and Canada are working on a deal to ease US Section 232 tariffs on Canadian steel and autos, two US and four Canadian sources told Reuters on October 26.[17] Because Commerce administers those tariffs, Commerce Secretary Howard Lutnick, not the Trade Representative’s office, is at the center of the talks, and he has been in regular contact with Canada’s Dominic LeBlanc, the sources said.

A Canadian industry source said any deal would likely be narrow. Trump has said he will raise the tariffs on Canadian steel and autos to 50% from January 1, 2027, and told a rally on October 25 that the dispute would be resolved “soon,” Reuters reported.[18] The White House, Commerce and the Trade Representative’s office did not immediately comment.

Mexico Talks

Sheinbaum said on October 26 that Mexico and the United States are “very close” but have not yet reached an agreement to cut tariffs on steel, aluminum and autos, and that Economy Secretary Marcelo Ebrard is in close contact with the Trade Representative’s office and Commerce.[19] Mexico also wants to avoid new tariffs as talks on reviewing the US-Mexico-Canada Agreement go on, the report said.

Domestic Affairs

United States

Forty percent of Republicans expected tariffs to have a mostly positive effect in October, down from 49% in January, according to Pew Research, and an AP-NORC poll found 64% of Americans think Trump has gone too far on new tariffs, Axios reported.[20] Senator Susan Collins of Maine said she helped secure the exemptions for some Canadian goods announced last week, and Iowa’s farmers union endorsed the full Democratic congressional slate, citing trade policy, Axios said.

Canada and Mexico

Canada said it remains in constructive dialogue with Washington, and Mexico said its negotiator is still talking with US officials (see Statements).[21]

Assessment

Assessment: Tariffs are now a midterm issue, which raises the odds of limited relief for Canada and Mexico before November 3 while the headline rates stay in place.

Statements by Government Officials on Trade

United States statements come first; statements by other governments are secondary and labeled. Quotes are verbatim and attributed.

United States

Quotes: United States
DateSpeakerRole/OrgQuoteContext/TopicSource
2026-10-26US Trade Representative“We’re trying to create another American century here”axios.com [22]
2026-10-24President“Without tariffs, they wouldn’t be coming in”axios.com [23]

Other governments (secondary)

Quotes: Other governments (secondary)
DateSpeakerRole/OrgQuoteContext/TopicSource
2026-10-26Minister responsible for Canada-US trade“Canada remains in constructive dialogue with our U.S. counterparts on a range of priorities”investing.com [24]

Sheinbaum’s remarks were made in Spanish and are paraphrased above.

What to Watch (Assessment)

  • Whether a US-Canada steel and auto deal comes before the November 3 elections.
  • A signed US-Mexico deal on steel, aluminum and autos.
  • Public comments on the Section 301 shipbuilding pause and any Chinese response.
  • The new Canada product list taking effect on October 30.

Trade War lenses

Analysis

This analysis applies the Trade Lenses framework to the day’s trade news.[2]

Deals & Agreements

No deal was signed in the window. Washington and Ottawa have reopened tariff bargaining two months after their talks collapsed, with relief on steel and autos under discussion (see US-Canada Steel and Auto Talks).[3] Mexico’s President Claudia Sheinbaum said on October 26 that talks with Washington on steel, aluminum and autos are very close but not finished (see Mexico Talks).[4]

Imbalances & Impact

The tariffs at stake are large: up to 50% on Canadian steel and 25% on Canadian autos, Reuters reported.[5] Mexico faces 50% on steel and aluminum and 25% on some vehicles, with exceptions, according to a Mexican news agency.[6]

Chokepoints & Dependencies

North American auto supply chains remain the pressure point. US-Canada talks broke down in August partly over duties on medium- and heavy-duty vehicles that matter to Canadian factories, Reuters reported.[7]

Negotiating Power

US sources told Reuters that Washington wants more concessions from Canada, while a Canadian source said a deal before the November 3 elections was possible.[8] Midterm pressure may weaken Washington’s hand: tariffs on Canadian goods have become a liability for Republican candidates in border states, the agency reported.

Policy & Economics

The Commerce Department published a notice on October 26 keeping antidumping and countervailing duties on certain small vertical shaft engines from China, after it and the International Trade Commission found that ending them would likely lead to renewed dumping and harm to US industry.[9] The US Trade Representative’s proposal to extend the pause of its Section 301 action on Chinese shipbuilding through January 9, 2027, was formally published the same day.[10]

Bloc Competition

China’s State Council Information Office restated Beijing’s firm opposition to the proposed US limits on outbound investment.[11] Sheinbaum ruled out a full free trade agreement with Brazil, saying the two countries would seek complementary deals instead (see Mexico Talks).[12]

Business & Markets

Trump said at a Georgia rally on October 24 that Audi would build a $4.2 billion factory, its first in the United States, expected to create 4,500 jobs; Audi cited other reasons too, including closeness to US customers, Axios reported.[13]

Trade assessment

Who has the leverage
Washington, which can offer Section 232 relief to Canada and Mexico before the elections.
Biggest chokepoint
North American autos, steel and aluminum.
Likeliest deal
Mexico, where both governments describe talks as very close.
Main risk
a narrow or delayed Canada deal that leaves the planned January 1 increase in place.
US interest
cutting costs for US manufacturers and voters while keeping pressure on trade partners.

Analysis by Peter’s World using the Trade War lenses. Numbered notes link to the footnotes at the end of this report. Scores, where shown, are judgments, not measurements.

Additional sources

Source notes for this run are on the War Room page.[25]

Footnotes

  1. [1] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  2. [2] Peter’s World, “Trade Lenses framework”, https://petersworld.org/trade-lenses-framework/. Published: Oct 11, 2026. Retrieved: 2026-10-26.
  3. [3] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  4. [4] El Diario (Agencia Reforma), “Aún no hay acuerdo comercial con EU.- CSP”, https://diario.mx/nacional/2026/oct/26/aun-no-hay-acuerdo-comercial-con-eu-csp-1145383.html. Published: Oct 26, 2026. Retrieved: 2026-10-26. In Spanish; quotes are translated by Peter’s World.
  5. [5] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  6. [6] El Diario (Agencia Reforma), “Aún no hay acuerdo comercial con EU.- CSP”, https://diario.mx/nacional/2026/oct/26/aun-no-hay-acuerdo-comercial-con-eu-csp-1145383.html. Published: Oct 26, 2026. Retrieved: 2026-10-26. In Spanish; quotes are translated by Peter’s World.
  7. [7] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  8. [8] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  9. [9] US Commerce Department, International Trade Administration (Federal Register), “Certain Small Vertical Shaft Engines Between 99cc and up to 225cc, and Parts Thereof From the People’s Republic of China: Continuation of Antidumping and Countervailing Duty Orders”, https://www.federalregister.gov/documents/2026/10/26/2026-21819/certain-small-vertical-shaft-engines-between-99cc-and-up-to-225cc-and-parts-thereof-from-the-peoples. Published: Oct 26, 2026. Retrieved: 2026-10-26. Read via the Federal Register API.
  10. [10] Office of the US Trade Representative (Federal Register), “Request for Comments on Further Suspension of Section 301 Action: China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance”, https://www.federalregister.gov/documents/2026/10/26/2026-21755/request-for-comments-on-further-suspension-of-section-301-action-chinas-targeting-of-the-maritime. Published: Oct 26, 2026. Retrieved: 2026-10-26. Read via the Federal Register API.
  11. [11] State Council Information Office of China, “China voices firm opposition to US proposal to expand outbound investment curbs”, http://english.scio.gov.cn/pressroom/2026-10/26/content_118749017.html. Published: Oct 26, 2026. Retrieved: 2026-10-26.
  12. [12] El Diario (Agencia Reforma), “Aún no hay acuerdo comercial con EU.- CSP”, https://diario.mx/nacional/2026/oct/26/aun-no-hay-acuerdo-comercial-con-eu-csp-1145383.html. Published: Oct 26, 2026. Retrieved: 2026-10-26. In Spanish; quotes are translated by Peter’s World.
  13. [13] Axios, “Trump tariffs test Republicans ahead of midterms”, https://www.axios.com/2026/10/26/trump-tariffs-midterms-republicans. Published: Oct 26, 2026. Retrieved: 2026-10-26. Cites Pew Research and AP-NORC polls.
Show 12 more sources
  1. [14] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  2. [15] El Diario (Agencia Reforma), “Aún no hay acuerdo comercial con EU.- CSP”, https://diario.mx/nacional/2026/oct/26/aun-no-hay-acuerdo-comercial-con-eu-csp-1145383.html. Published: Oct 26, 2026. Retrieved: 2026-10-26. In Spanish; quotes are translated by Peter’s World.
  3. [16] Axios, “Trump tariffs test Republicans ahead of midterms”, https://www.axios.com/2026/10/26/trump-tariffs-midterms-republicans. Published: Oct 26, 2026. Retrieved: 2026-10-26. Cites Pew Research and AP-NORC polls.
  4. [17] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  5. [18] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  6. [19] El Diario (Agencia Reforma), “Aún no hay acuerdo comercial con EU.- CSP”, https://diario.mx/nacional/2026/oct/26/aun-no-hay-acuerdo-comercial-con-eu-csp-1145383.html. Published: Oct 26, 2026. Retrieved: 2026-10-26. In Spanish; quotes are translated by Peter’s World.
  7. [20] Axios, “Trump tariffs test Republicans ahead of midterms”, https://www.axios.com/2026/10/26/trump-tariffs-midterms-republicans. Published: Oct 26, 2026. Retrieved: 2026-10-26. Cites Pew Research and AP-NORC polls.
  8. [21] Reuters, via Investing.com, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Published: Oct 26, 2026, 3:31 PM ET. Retrieved: 2026-10-26. Based on two US and four Canadian sources speaking anonymously.
  9. [22] (statement) Jamieson Greer, US Trade Representative, in a Bloomberg profile, via Axios, “Trump tariffs test Republicans ahead of midterms”, https://www.axios.com/2026/10/26/trump-tariffs-midterms-republicans. Statement made Oct 26, 2026; published Oct 26, 2026. Retrieved: 2026-10-26.
  10. [23] (statement) President Donald Trump at a Georgia rally, via Axios, “Trump tariffs test Republicans ahead of midterms”, https://www.axios.com/2026/10/26/trump-tariffs-midterms-republicans. Statement made Oct 24, 2026; published Oct 26, 2026. Retrieved: 2026-10-26.
  11. [24] (statement) Spokesperson for Dominic LeBlanc, via Reuters, “Exclusive-US, Canada working on deal to ease steel, auto tariffs, sources say”, https://www.investing.com/news/economy-news/exclusiveus-canada-working-on-deal-to-ease-steel-auto-tariffs-sources-say-4973470. Statement made Oct 26, 2026; published Oct 26, 2026. Retrieved: 2026-10-26.
  12. [25] Peter’s World, “Source notes, Oct 26 Trade War run”, https://petersworld.org/war-room/. Published: Oct 26, 2026. Retrieved: 2026-10-26. war.gov news feed checked first, with no trade item found. The State Department feed returned an error page. Federal Register pages were read through its API. The Section 301 port-fee proposal was covered on Oct 24 and China’s investment objection on Oct 25; only their new publication steps are noted here.

Sources

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