Ottawa will ease certain retaliatory duties but keep protections on autos, steel, and aluminium.
Canada is shifting its trade stance with the United States. Prime Minister Mark Carney said Friday that the country will remove some of the tariffs it imposed on American imports, though key levies on vehicles, steel, and aluminium will stay in place. The policy will take effect on September 1.
Trade move follows missed deal deadline
The decision comes after Carney’s first call with President Donald Trump since both governments failed to meet their self-imposed deadline for a new trade deal. Canada had earlier retaliated against US measures by imposing 25% duties on roughly C$30bn (£16bn; $21.7bn) in goods, including orange juice and washing machines. Washington’s own tariffs stood at 35% on imports not covered under the current trade framework.
Carney explained that Canada will now align with the US by dropping duties on products that qualify under the US-Mexico-Canada Agreement (USMCA). He argued this restores free trade on most goods between the two countries.
The White House welcomed the move, describing it as “long overdue.” In a statement to CBS, it said Washington looks forward to further talks on trade and security with Ottawa. Trump later told reporters that he expects to speak again with Carney soon.
Domestic criticism and political pushback
Despite backing from many Canadians for retaliatory tariffs, the prime minister faced criticism at home. Conservative leader Pierre Poilievre accused him of retreating, claiming Carney’s tough “elbows up” stance had disappeared. Carney countered that Canada’s unique deal under USMCA keeps its effective tariff rate at about 5.6%—well below the global average of around 16%—and that protecting this advantage is crucial for Canadian workers and businesses.
Since January, Trump has raised or introduced tariffs on goods from around the world, warning of more hikes as part of his effort to secure favorable trade deals. US ambassador to Canada Pete Hoekstra warned recently that Ottawa’s countermeasures risk undermining negotiations, saying they had “pulled the rug out from USMCA.” He also criticized personal attacks by Canadian politicians on Trump and his team.
Focus shifts to key industries
Attention now turns to sensitive sectors. Carney said upcoming negotiations will focus on autos, steel, aluminium, and lumber ahead of next year’s scheduled USMCA review. The United States currently enforces a 50% tariff on steel and aluminium imports—excluding the UK—as well as copper and autos. Canada has maintained its 25% retaliatory duties on American metals and cars.
Economists caution that these measures are hitting Canada hard. Steel and aluminium, where Canada is a major supplier, have already seen cancelled contracts and production cuts. The auto industry is also under pressure, given how manufacturing relies on supply chains that cross North American borders multiple times. Ontario, the country’s auto hub, has reported 38,000 job losses in the past three months, mostly in manufacturing.
