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Canadian Prime Minister Mark Carney announced Friday that the nation will lift some of its retaliatory tariffs on U.S. goods, while maintaining levies on automobiles, steel, and aluminum.
This decision follows a phone conversation between Carney and President Donald Trump, their first since the two countries missed a self-imposed deadline for reaching a trade agreement.
Canada had previously imposed a 25% tariff on approximately C$30 billion (£16 billion; $21.7 billion) worth of U.S. goods, encompassing a range of products including orange juice and washing machines.
The tariff increase was in response to U.S. tariffs on Canadian goods, which, as of August, were valued at 35% on all goods not compliant with the existing free trade agreement between the two countries.
Carney stated that Canada will now mirror the U.S. by terminating tariffs on goods compliant with the U.S.-Mexico-Canada Agreement (USMCA), thereby “re-establishing free trade for the vast majority” of goods traded between the two nations.
The decision is scheduled to take effect on September 1, according to Carney.
In a statement provided to CBS, the BBC’s U.S. news partner, the White House welcomed Canada’s move, describing it as “long overdue” and expressing anticipation for continued trade and national security discussions with Canada.
Canada is among several nations targeted by U.S. tariffs as part of President Trump’s global trade strategy, and is one of only two countries, alongside China, to have implemented retaliatory levies on American goods.
Public opinion polls indicate that a majority of Canadians support retaliatory tariffs against the U.S.
Carney, who assumed office following an April general election, campaigned on a platform of aggressive negotiation tactics with President Trump, described as an “elbows up” approach, a reference to a hockey term.
In response to inquiries from reporters about whether Canada was softening its stance, Carney asserted that Canada has a more favorable tariff arrangement with the U.S. than many other countries, owing to the free trade carve-out.
He noted that the effective tariff rate on Canadian goods is approximately 5.6%, significantly lower than the average of around 16% for other countries.
“As we work to address outstanding trade issues with the U.S., it’s important we do everything we can to preserve this unique advantage for Canadian workers and businesses,” he said.
Carney indicated that Canada’s focus will now be on expediting negotiations regarding automobiles, steel, aluminum, lumber, and other key sectors, ahead of the scheduled review of the USMCA free trade agreement next year.
The U.S. has imposed a 50% tariff on all steel and aluminum imports, excluding those from the UK, as well as on copper imports. Additionally, a 25% tariff has been placed on aluminum imports.
Canada, in turn, has implemented 25% tariffs on American steel, aluminum, and automobiles. These tariffs will remain in effect for the time being, according to Carney.
Since returning to the White House in January, President Trump has pursued a global trade strategy involving the imposition or increase of tariffs on goods from various countries, threatening further increases as he seeks to negotiate trade agreements deemed beneficial to the U.S.
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