Ottawa will remove select retaliatory duties while keeping tariffs on cars, steel, and aluminium.
Prime Minister Mark Carney announced Friday that Canada will roll back part of its trade retaliation against the United States. While tariffs on vehicles, steel, and aluminium remain, other levies on American goods will be lifted starting September 1.
Step follows missed trade deadline
The announcement comes after Carney’s first phone conversation with President Donald Trump since both nations missed their self-imposed deadline for a new trade agreement. Canada had earlier imposed a 25% tariff on roughly C$30bn (£16bn; $21.7bn) of US goods, including appliances and orange juice, in response to US tariffs of 35% on products not covered under the existing free trade pact.
Carney said Canada will now remove tariffs on goods that qualify under the US-Mexico-Canada Agreement (USMCA), reinstating largely duty-free trade for the majority of goods crossing the border.
The White House welcomed the decision in a statement to CBS, calling it “long overdue” and expressing hope for continued discussions on trade and security. Trump later told reporters he expects to speak with Carney again soon.
Domestic reaction and political debate
While many Canadians support retaliatory tariffs, opposition figures criticized the move. Conservative leader Pierre Poilievre accused Carney of abandoning his “elbows up” negotiating approach, describing the decision as a retreat.
Carney defended the policy, pointing out that USMCA provides Canadian exporters with an effective tariff rate of around 5.6%, well below the global average of approximately 16%. He emphasized the importance of maintaining this advantage for Canadian workers and businesses.
Since January, Trump has introduced or increased tariffs on goods from several countries and threatened further hikes to secure deals favorable to the US. US ambassador Pete Hoekstra warned that Canada’s counter-tariffs could complicate negotiations and criticized Canadian politicians for attacking Trump personally instead of addressing policy issues.
Focus turns to key industries
Carney said the next round of talks will concentrate on autos, steel, aluminium, lumber, and other important sectors ahead of next year’s scheduled USMCA review.
The US currently enforces a 50% tariff on steel and aluminium imports—excluding the UK—along with duties on copper and vehicles. Canada’s 25% tariffs on American metals and autos will remain in place for now.
Economists warn these measures are already affecting Canada’s economy. As a major supplier of steel and aluminium to the US, Canadian companies have reported contract cancellations and production reductions. The auto industry is also under pressure, with vehicles often crossing borders between the US, Canada, and Mexico multiple times during assembly. Ontario, the center of Canadian auto manufacturing, has lost 38,000 jobs over the past three months, most in factories.
