Canada to Remove Retaliatory Tariffs on U.S. Goods, Carney Confirms
Canada will eliminate many of its retaliatory tariffs on American imports as part of efforts to reset trade relations with the United States, Prime Minister Mark Carney announced on Friday. The move comes alongside renewed talks aimed at forging a new trade and security framework between the two countries.
Carney confirmed that tariffs on U.S. autos, steel, and aluminum will remain in place for now. However, he emphasized that Canada will match the U.S. by lifting duties on goods specifically covered under the U.S.-Mexico-Canada Agreement (USMCA). He called the development a “positive step” after Washington clarified it would not impose tariffs on Canadian goods that comply with USMCA rules.
“With this decision, Canada and the U.S. have re-established free trade for the vast majority of our goods,” Carney said at a press conference in Ottawa.
The announcement strengthened the Canadian dollar, which gained 0.5% to C$1.3837 against the U.S. dollar by midday Friday, equal to 72.27 U.S. cents.
Talks between Ottawa and Washington on a broader trade and security agreement have been ongoing for months, though officials admit that a final deal is not yet close. Canada, along with China, had been one of the few nations to retaliate against U.S. tariffs, a stance that had drawn criticism from the American administration.
A White House official welcomed the move, saying it was “long overdue” and added that discussions on trade and national security would continue. Carney also revealed that he had spoken with U.S. President Donald Trump on Thursday, confirming that the removal of tariffs was linked to advancing negotiations.
Carney campaigned in the April election on a promise to oppose Trump’s tariffs but has since softened his tone. He has already dropped a proposed digital services tax that U.S. companies opposed and pulled back from additional sanctions that had been threatened earlier in the year. Using an ice hockey analogy, Carney said it was time for a more moderate strategy: “We have the best deal of anyone in the world right now.”
The decision could spark political challenges at home. Carney’s Liberal government holds only a minority in the House of Commons, relying on opposition support to pass confidence votes. Conservative leaders have accused him of being too soft in dealings with the U.S.
Carney’s predecessor, Justin Trudeau, had imposed 25% tariffs on C$30 billion worth of U.S. goods in March 2022 as retaliation against Trump’s initial trade duties. That was part of a larger C$155 billion counter-tariff plan, of which C$125 billion had been delayed.
