Ottawa will remove some retaliatory duties but retain measures on vehicles, steel, and aluminium.
Prime Minister Mark Carney announced Friday that Canada will scale back parts of its trade response against the United States, confirming that a portion of the tariffs on American products will be lifted while crucial duties on cars, steel, and aluminium remain in place. The changes begin on September 1.
Shift follows stalled trade deadline
The move comes shortly after Carney’s first phone conversation with President Donald Trump since both countries failed to meet their target date for finalizing a new trade pact. Canada had previously answered US actions with 25% duties on about C$30bn (£16bn; $21.7bn) of goods, including appliances and fruit juice. Washington had earlier set tariffs of 35% on imports not covered by the existing free trade rules.
Carney said Ottawa will now eliminate levies on items recognized under the US-Mexico-Canada Agreement (USMCA), restoring duty-free trade for most cross-border shipments.
The White House, in a statement to CBS, said it welcomed the announcement and described it as “long overdue,” adding that it looks forward to further cooperation. Trump later told reporters that he plans another call with Carney in the near future.
Political reaction inside Canada
While surveys show Canadians broadly support countermeasures against the US, opposition parties criticized the policy change. Conservative leader Pierre Poilievre accused Carney of stepping back from his earlier tough stance, saying his promised “elbows up” approach had disappeared.
Carney defended the shift, noting that under USMCA, Canadian exports face an effective tariff rate of about 5.6%, compared with a worldwide average of roughly 16%. Preserving that advantage, he argued, is essential for Canadian companies and employees.
Since his return to office in January, Trump has introduced or expanded tariffs on imports globally, warning that more increases could come as he pushes for trade deals favorable to the US. US ambassador Pete Hoekstra recently said Canada’s counter-tariffs risk undermining the agreement, and pointed to personal criticism of Trump and his team from Canadian politicians as an obstacle in talks.
Spotlight on major industries
Carney said the next phase of discussions will concentrate on autos, steel, aluminium, and lumber, ahead of the scheduled USMCA review next year.
The US currently applies a 50% duty on imports of steel and aluminium—except from the UK—along with tariffs on copper and vehicles. Canada has responded with 25% levies on American metals and cars, which will stay in effect.
Analysts warn that these measures are already taking a toll on Canada. As a leading supplier of steel and aluminium to the US, Canadian firms report reduced contracts and production cuts. The auto sector is also vulnerable, given its tightly linked supply chains across North America. Ontario, the country’s car manufacturing hub, has recorded 38,000 job losses over the past three months, most of them in factories.
