US President Donald Trump said on Sunday that his administration has a “concept” for a new trade agreement with Canada, as the two countries continue to face a dispute involving billions of dollars in reciprocal tariffs.

Speaking to reporters in Dubuque, Iowa, Trump said he had spoken with Canadian Prime Minister Mark Carney again the previous day and that the proposed agreement would benefit American farmers and the United States. He also said the deal could include the Keystone XL pipeline, a project cancelled by former President Joe Biden in 2021.

Trump said Canada would build and pay for the pipeline, while the United States would provide a route that he described as largely established. He did not provide further details, and Carney’s office did not immediately respond to a request for comment on those remarks.

Carney said on social media that the leaders’ discussion continued recent constructive talks on the broad terms of a mutually beneficial agreement. He said the prospective deal would create jobs, improve affordability and fully respect Canada’s languages, culture and sovereignty. Canadian and US teams are expected to work over the coming weeks toward that outcome.

The latest comments follow Trump’s statement last week that a trade agreement with Canada was close. Canada had previously reported limited progress in negotiations, despite efforts to reduce tariffs on steel and automobiles.

The tariff dispute has become a significant issue in some northern US states, including Michigan and Maine, ahead of Tuesday’s US midterm elections.

Sources: CNN Brasil.