President Donald Trump said he expects the U.S. and Canada can eventually reach a trade deal, but he remained vague about how and when an agreement might be achieved.

Trump made the remarks in an Oval Office meeting with Canadian Prime Minister Mark Carney on Tuesday. The president described the countries as being in “natural conflict” because they’re competing for the same business.

“He wants to make cars, we want to make cars, and we’re in competition. And the advantage we have is we have this massive market,” Trump said as he sat next to Carney.

But the president said the countries have “come a long way” in the trade talks. “We’re working on formulas and I think we’ll get there.”

The meeting marks Carney’s second visit to the White House since becoming prime minister earlier this year — with a trading relationship worth $900 billion on the line. The former central banker won an election in April on a promise to negotiate a new trade and security deal with the U.S., but Trump has only hiked tariffs since then.

Carney told Trump that Canada is the U.S.’s largest foreign investor, and suggested the pace of investment may accelerate — “probably $1 trillion in the next five years, if we get the agreement we expect to get.”

“There are areas where we compete, and it’s in those areas where we have to come to an agreement that works,” Carney said. “But there are more areas where we are stronger together, and that’s what we’re focused on.”

While Trump emphasized the “great love” between the U.S. and Canada and praised Carney as a “world-class leader,” the president and his officials also gave little sign they intend to significantly compromise on key sectors.

“Why do we make cars in Canada?” asked Commerce Secretary Howard Lutnick. “There are places we should work together and there are places where we have natural conflict.”

In addition to the sectoral tariffs on steel, aluminum, autos and lumber, Trump has raised levies on goods that don’t comply with the U.S.-Mexico-Canada Agreement to 35% from 25%. The trade war has caused job losses and put a chill on business investment, pushing Canada’s economy to contract in the second quarter.

Carney offered an olive branch to Trump in August when he announced the removal of most of Canada’s retaliatory tariffs on imports from the U.S. Canada’s new policy is to counter-tariff only products where U.S. tariffs are in place, such as steel and aluminum.

Asked by a reporter what was delaying a deal — if Carney was such a “great man,” as Trump described him — the president quipped, “Because I want to be a great man too.”

USMCA Review

Carney’s top negotiators, including his cabinet minister responsible for U.S. trade, Dominic LeBlanc, and Canada’s ambassador to the U.S., Kirsten Hillman, are still pushing for a near-term deal that would see some sectoral tariffs lowered or dropped.

But Carney has begun to signal a shift in focus somewhat to the 2026 review of the North American free trade deal Trump signed in his first term.

Asked whether he’d like to see a minimum tariff on Canada as part of that review, Trump said: “We’re going to have tariffs.” He reiterated his grievance about Canada’s supply-managed dairy sector, in which tariffs apply to U.S. exports over a certain quota.

Trump also said the U.S., Canada and Mexico “could” renegotiate the trilateral deal, or they could each “do different deals.” He said he doesn’t have a preference, but he wants to make the deal that’s best for his country — “also with Canada in mind.”

He said any deal between Canada and the U.S. would be “comprehensive,” encompassing dairy and other irritants.

Carney traveled to Mexico last month and pledged deeper cooperation with President Claudia Sheinbaum ahead of the review process. His officials have tried to pitch the U.S. on the importance of fortified North American supply chains, especially in Canada’s wealth of critical minerals, as a counter to China’s dominance.

He has also attempted to address long-standing U.S. complaints about Canada’s low military spending, agreeing to meet the North Atlantic Treaty Organization’s targets. Trump said the two leaders would discuss the U.S.’s proposed Golden Dome missile defense system during the closed-door portion of Tuesday’s meeting.

In his remarks in front of reporters, Trump joked twice about Canada becoming the 51st U.S. state — comments that have infuriated many Canadians and prompted boycotts of U.S. travel and products. But the president said he expects the relationship between the two countries to improve.

“The people of Canada, they will love us again,” Trump said. “Most of them still do.”

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(With assistance from Thomas Seal, Mario Baker Ramirez, Jennifer A. Dlouhy and Jaren Kerr.)

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