In brief
The Canadian government has decided to lift several retaliatory tariffs on US goods to match agreements under the USMCA, while maintaining some levies on autos and metals.
Canada's Prime Minister Mark Carney has announced that the country will reduce select retaliatory tariffs imposed on US goods, a decision affirming a commitment to re-establish free trade under the US-Mexico-Canada Agreement (USMCA). This move comes on the heels of a phone conversation with US President Donald Trump. While Canada had initially levied a 25% tariff on about C$30 billion worth of US products, including items like orange juice and washing machines, the new approach will focus on complying with the USMCA, enabling free trade on most goods. Effective September 1, Carney stated the change aims to promote better trade relations and acknowledges that Canada enjoys advantageous tariff rates compared to other nations. In a statement, the White House applauded Canada's decision, calling it "long overdue" while expressing eagerness for further discussions. However, the decision has faced criticism from Conservative leader Pierre Poilievre, who described it as a retreat from Carney’s more aggressive negotiating stance. Currently, Canada continues to impose tariffs on key sectors such as autos, steel, and aluminum due to ongoing disputes over US tariffs, which are significantly impacting Canada's economy. As the governments work towards continuous dialogue, the focus is expected to shift to resolving outstanding issues in critical industries. In light of job losses tied to these tariffs, especially within Ontario’s auto sector, experts warn of potential disruptions as trade negotiations become ever more crucial in the coming months.
