Ottawa will lift some retaliatory duties while maintaining tariffs on automobiles, steel, and aluminium.
Prime Minister Mark Carney said Friday that Canada is rolling back a portion of the tariffs it imposed on American imports. Key levies on cars, steel, and aluminium will remain, with the changes set to take effect September 1.
Action follows missed trade deadline
The announcement comes after Carney’s first conversation with President Donald Trump since both countries missed the deadline for completing a new trade agreement. Previously, Canada had imposed a 25% tariff on around C$30bn (£16bn; $21.7bn) in US products, including appliances and fruit juices. The US had already set tariffs of 35% on goods not covered under existing free trade rules.
Carney stated that Ottawa will now remove duties on goods covered by the US-Mexico-Canada Agreement (USMCA), reinstating duty-free trade for most cross-border shipments.
The White House welcomed the move in a statement to CBS, calling it “long overdue” and expressing optimism for continued discussions on trade and security. Trump also told reporters that he expects to speak with Carney again soon.
Domestic reaction and political debate
While most Canadians have supported counter-tariffs, the decision drew criticism from opposition leaders. Conservative Pierre Poilievre said Carney had abandoned his earlier “elbows up” approach, accusing him of a political retreat.
Carney defended the decision, pointing out that under USMCA, Canadian goods face an effective tariff rate of about 5.6%, far lower than the global average of roughly 16%. He emphasized the importance of preserving this advantage for Canadian businesses and workers.
Since January, Trump has implemented or increased tariffs on imports from around the world and warned of additional hikes in pursuit of trade agreements favorable to the US. US ambassador Pete Hoekstra also warned that Canada’s counter-tariffs risked undermining negotiations and criticized personal attacks on Trump by some Canadian politicians.
Focus shifts to key sectors
Carney said upcoming talks will concentrate on autos, steel, aluminium, and lumber, ahead of next year’s USMCA review.
Currently, the US imposes a 50% tariff on steel and aluminium imports—excluding the UK—as well as duties on copper and automobiles. Canada has maintained its 25% tariffs on American metals and vehicles.
Economists warn that these measures are having a significant impact. Canada, as a major supplier of steel and aluminium to the US, has already seen contract cancellations and production reductions. The auto industry is particularly affected, with vehicles often crossing borders multiple times during assembly. Ontario, the center of Canadian car manufacturing, has reported 38,000 job losses in the past three months, mostly in manufacturing.
