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Canada has said it would lift billions of dollars’ worth of retaliatory tariffs on US goods in an attempt to reduce economic tensions with the White House.
Prime Minister Mark Carney on Friday said Ottawa would remove the 25 per cent tariff it has imposed on many US goods since March, but he added reciprocal steel and aluminium duties would remain in place.
“I’m announcing today that the Canadian government will now match the United States by removing all of Canada’s tariffs on US goods, specifically covered under [the United States-Mexico-Canada trade agreement],” he said. “More than 85 per cent of Canada-US trade is now tariff free.”
Carney added the measures will come into effect September 1.
Ottawa’s concession is the latest episode in a months-long trade battle between the US and one of its largest trading partners. Relations were rocked in March, when Trump imposed duties as steep as 25 per cent on Canadian exports.
Ottawa responded with retaliatory tariffs of 25 per cent, including on steel and car parts, though it later lifted some of those measures in the face of US pressure and because of the impact on local businesses.
A US official, speaking on the condition of anonymity, said Canada’s move on Friday came after discussions with commerce secretary Howard Lutnick and other White House representatives.
“They were told retaliatory tariffs were not helping their standing to negotiate something” with the president, they said.
Carney and Trump spoke on the phone on Thursday about Ottawa’s trading relationship with Washington, which is worth C$1.3tn (US$941bn). Canada sells most of its products and services to the US.
Trump on Friday said: “I like Carney a lot. I think he’s a good person. And we had a very good talk yesterday, so I think it’ll be good . . . we’re going to have another call soon.”
While Canada had hoped to resolve the trade dispute with the US by July 21, that deadline passed without a deal.
The US welcomed Ottawa’s decision to drop some of its retaliatory tariffs.
“We look forward to continuing our discussions with Canada on the administration’s trade and national security concerns,” a White House official said.
Carney won a federal election in April on the promise that he would stand up to Trump and use his experience as a central bank governor to steer his country through the economic turmoil unleashed by tariffs.
Carney on Friday said: “Canada currently has the best trade deal with the United States. And while it’s different from what we had before, it is still better than that of any other country.”
Asked if Canada has any assurances from Trump that this move will kick-start negotiations, Carney replied: “Yes.”
Additional reporting by Stephanie Stacey in Washington
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