Prime Minister Mark Carney had a "productive and wide-ranging" phone conversation with U.S. President Donald Trump on Thursday, his office said in a statement.
The statement said the leaders discussed current trade challenges, opportunities and shared priorities in a new economic and security relationship.
It said Trump and Carney also discussed how to support long-term peace and security for Ukraine and Europe. Trump and Carney "agreed to reconvene shortly," the statement added.
Ottawa had dampened expectations of any agreement materializing ahead of Trump's August deadline for nations around the world to make a deal. Carney has said he'll only make an agreement that is good for Canada.
Earlier this month, Trump increased tariffs on Canada to 35 per cent with the White House saying Ottawa did not do enough to curb the flow of fentanyl. It also pointed to Canada's implementation of retaliatory tariffs.
U.S. government data shows a minuscule amount of fentanyl is seized at the northern border.
Those tariffs do not apply to goods compliant with the Canada-U.S.-Mexico Agreement on trade.
Canada is also being hammered by tariffs on steel, aluminum, copper and automobiles.
Earlier Thursday, Foreign Affairs Minister Anita Anand had her first official meeting with U.S. Secretary of State Marco Rubio in Washington.
Anand and Rubio shook hands in front of Canadian and American flags in a room of the U.S. State Department. Neither responded to questions from reporters.
The State Department said Anand and Rubio discussed efforts to support Haiti's security, peace negotiations to end the Russia-Ukraine war and ways to strengthen the Western Hemisphere's response to China.
The State Department said they also talked about "Hamas's ongoing obstruction of peace in Gaza."
Trump last month criticized Carney's move to recognize a Palestinian state.
The State Department under Rubio has taken significant action to quell criticism of Israel's actions such as revoking visas for foreign students who voiced support for Palestine and sanctioning officials with the International Criminal Court pursuing cases against Israeli Prime Minister Benjamin Netanyahu and a former Israeli defence minister.
Anand on Thursday joined 20 other foreign ministers from Europe, Australia, Japan and the United Kingdom in condemning Israel for giving final approval to a controversial settlement project in the occupied West Bank.
A joint letter from the foreign ministers said it will "make a two-state solution impossible."
"We condemn this decision and call for its immediate reversal in the strongest terms," the letter said.
Picture Courtesy: THE CANADIAN PRESS/AP-Cliff Owen
