Ottawa will remove select retaliatory tariffs but maintain levies on vehicles, steel, and aluminium.
Prime Minister Mark Carney announced Friday that Canada will roll back a portion of its trade retaliation against the United States. While tariffs on cars, steel, and aluminium remain, other duties on American goods will be eliminated beginning September 1.
Decision follows missed trade deadline
The announcement comes after Carney’s first conversation with President Donald Trump since both nations missed the deadline to finalize a new trade agreement. Previously, Canada imposed a 25% tariff on about C$30bn (£16bn; $21.7bn) of US products, including appliances and orange juice, in response to Washington’s 35% tariffs on goods outside the existing free trade framework.
Carney explained that Canada will now remove tariffs on goods covered by the US-Mexico-Canada Agreement (USMCA), restoring largely duty-free trade between the two countries.
The White House welcomed the decision in a statement to CBS, calling it “long overdue” and expressing optimism for ongoing discussions on trade and security. Trump told reporters he expects to speak with Carney again soon.
Domestic criticism and political debate
Although many Canadians support retaliatory tariffs, the policy shift drew criticism from opposition figures. Conservative leader Pierre Poilievre accused Carney of abandoning his “elbows up” negotiating stance, calling the move a retreat.
Carney defended the decision, noting that under USMCA, Canadian goods face an effective tariff rate of about 5.6%, far below the global average of roughly 16%. He emphasized the importance of preserving this advantage for Canadian businesses and workers.
Since January, Trump has introduced or raised tariffs on imports from several countries and warned of further increases to secure trade deals favorable to the US. US ambassador Pete Hoekstra warned that Canada’s counter-tariffs could hinder negotiations and criticized Canadian politicians for attacking Trump personally instead of focusing on policy.
Focus shifts to major sectors
Carney said the next stage of negotiations will concentrate on autos, steel, aluminium, and lumber ahead of next year’s USMCA review.
The US currently imposes a 50% tariff on steel and aluminium imports—excluding the UK—along with duties on copper and automobiles. Canada’s 25% tariffs on American metals and vehicles will remain.
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 reduced contracts and production cuts. The auto industry is also under pressure due to integrated North American supply chains. Ontario, Canada’s automotive hub, has lost 38,000 jobs in the past three months, mostly in manufacturing.
