In a recent move aimed at reducing trade tensions, Canada's Prime Minister Mark Carney declared on Friday that the country will eliminate a portion of its retaliatory tariffs on US goods, while retaining levies on critical sectors such as autos, steel, and aluminum. This decision follows his first phone conversation with President Donald Trump since the two countries missed a self-imposed deadline for concluding a trade agreement.
Canada had previously imposed a 25% tariff on approximately C$30 billion (around $21.7 billion) in US products, ranging from orange juice to washing machines, as a countermeasure to US tariffs imposed on Canadian goods. Currently, US tariffs are at 35% on products that do not comply with the existing free trade agreement.
In his announcement, Carney stated that Canada will align with the US by removing tariffs on goods that meet the criteria of the US-Mexico-Canada free trade agreement (USMCA). He emphasized that this action would "re-establish free trade for the vast majority" of trade between both nations, with the change set to take effect from September 1.
The White House has welcomed Canada's decision, describing it as "long overdue," and expressing eagerness to continue discussions regarding trade and national security with Canada.
Canada's imposition of tariffs against the US is relatively unique, with Canada being one of only two nations, alongside China, to have placed retaliatory tariffs on American products. Polls indicate that many Canadians support these tariffs, supporting Carney's determined negotiation style, which he referenced as an "elbows up" approach.
Despite the reductions, Carney clarified that the tariffs on US steel, aluminum, and autos will remain intact for now, in line with ongoing discussions. He pointed out that Canada benefits from a more favorable tariff arrangement with the US compared to other nations, with an effective tariff rate of about 5.6% for Canadian goods, significantly lower than the average rate of 16% for other countries.
Looking ahead, Carney mentioned that negotiations concerning autos, steel, aluminum, lumber, and other important sectors will be accelerated, particularly in anticipation of a review of the USMCA agreement next year. This reflects a broader strategy by the Trump administration, which has expanded tariffs globally as part of its trade policies, particularly targeting certain imports.
Canada had previously imposed a 25% tariff on approximately C$30 billion (around $21.7 billion) in US products, ranging from orange juice to washing machines, as a countermeasure to US tariffs imposed on Canadian goods. Currently, US tariffs are at 35% on products that do not comply with the existing free trade agreement.
In his announcement, Carney stated that Canada will align with the US by removing tariffs on goods that meet the criteria of the US-Mexico-Canada free trade agreement (USMCA). He emphasized that this action would "re-establish free trade for the vast majority" of trade between both nations, with the change set to take effect from September 1.
The White House has welcomed Canada's decision, describing it as "long overdue," and expressing eagerness to continue discussions regarding trade and national security with Canada.
Canada's imposition of tariffs against the US is relatively unique, with Canada being one of only two nations, alongside China, to have placed retaliatory tariffs on American products. Polls indicate that many Canadians support these tariffs, supporting Carney's determined negotiation style, which he referenced as an "elbows up" approach.
Despite the reductions, Carney clarified that the tariffs on US steel, aluminum, and autos will remain intact for now, in line with ongoing discussions. He pointed out that Canada benefits from a more favorable tariff arrangement with the US compared to other nations, with an effective tariff rate of about 5.6% for Canadian goods, significantly lower than the average rate of 16% for other countries.
Looking ahead, Carney mentioned that negotiations concerning autos, steel, aluminum, lumber, and other important sectors will be accelerated, particularly in anticipation of a review of the USMCA agreement next year. This reflects a broader strategy by the Trump administration, which has expanded tariffs globally as part of its trade policies, particularly targeting certain imports.
