The Canadian government is banking on the hope that U.S. President Donald Trump’s tariff policies will lead to a favorable trade agreement. Dominic LeBlanc, the minister responsible for cross-border trade, expressed confidence last month that domestic pressures in the U.S. would create an opportunity for a deal that benefits both economies.

Recent developments suggest that the Canadian government may be in a fortuitous position. On Friday, Trump announced a reduction in tariffs on various agricultural products, including beef, coffee, and bananas, due to rising concerns about the cost of living in the U.S. These products had been subject to a 10 percent tariff since April, with some, like Brazilian beef and coffee, facing tariffs as high as 50 percent. The tariff reduction was welcomed by trading partners such as Argentina, Brazil, and Costa Rica.

The shift in tariff policy appears to be influenced by a growing focus on affordability in U.S. politics, highlighted by recent elections in which moderate Democrats gained ground. In an interview following these elections, Trump claimed that grocery prices were decreasing and that overall prices were down, despite evidence to the contrary. Grocery prices have not fallen, and gas prices have remained stable at around $3 per gallon.

While inflation was reported at three percent in September, many consumers feel the pinch at the checkout. A recent poll indicated that 71 percent of American adults are spending more on groceries compared to a year ago. The Bureau of Labor Statistics reported significant price increases for essential items, including a 40 percent rise in ground roast coffee and an 11.5 percent increase in ground beef.

The challenges faced by importers and wholesalers, who operate on slim margins, have compounded the issue. Unlike importers of durable goods, they could not stockpile perishable items before tariffs were imposed. Consumer sentiment has also dipped, reflecting concerns similar to those seen during the inflation surge post-pandemic.

As Trump faces declining approval ratings and potential legal challenges regarding his tariff policies, experts suggest that his unilateral approach may be waning. Ian Bremmer, president of Eurasia Group, noted that the peak of Trump’s unilateralism on the global stage may have passed.

In addition to waiting for price adjustments, the Canadian government is also exploring sectoral agreements with the Trump administration, particularly concerning steel, aluminum, and automotive industries. Prime Minister Mark Carney has been actively involved in these discussions, aiming to secure beneficial terms for Canada amid the shifting trade landscape.