Canada expressed optimism about reaching a new trade agreement with the United States after dropping most of its retaliatory tariffs.

Canadian Finance Minister Dominic LeBlanc said talks with Commerce Secretary Howard Lutnick, along with direct communication between Canadian Prime Minister Mark Carney and President Donald Trump, have improved prospects for renewed negotiations.

On Friday, Carney announced the removal of retaliatory tariffs on tens of billions of dollars of U.S. goods, a move Trump suggested could reopen stalled trade talks. LeBlanc described this step as crucial groundwork for potential renegotiation of the U.S.-Mexico-Canada Agreement and hinted that discussions also touch on cross-border investments.

However, LeBlanc said Washington has given no signal it will roll back steep tariffs on steel and aluminum, which Trump doubled to 50% in June. Canada remains particularly vulnerable, he said, because the tariffs hit sectors where the two economies are most integrated, such as autos and manufacturing.

The relationship between the the U.S. and Canada goes beyond simple trade, LeBlanc said, noting that the two countries "build things together and sell them around the world."

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