Canada's Prime Minister Mark Carney recently declared that the country will be easing some of its retaliatory tariffs on US goods, though it will continue to impose levies on autos, steel, and aluminium. This decision follows the first phone call between Carney and President Donald Trump after their countries missed a vital trade agreement deadline.
Previously, Canada had imposed a hefty 25% tariff on around C$30 billion (approximately $21.7 billion) worth of US products, affecting everything from orange juice to washing machines in response to US tariffs on Canadian goods. As of September 1, Canada will remove tariffs on items compliant with the US-Mexico-Canada Free Trade Agreement (USMCA), restoring free trade for most goods exchanged between the nations.
The White House has welcomed Canada's decision, labeling it "long overdue," and expressed a desire to continue trade discussions. Carney indicated that this move is pivotal for Canadian workers and businesses, allowing Canada to maintain a comparatively lower tariff rate of around 5.6% on goods, instead of the higher averages other countries face.
Criticism from Conservative leader Pierre Poilievre has emerged, suggesting that Carney is backing down in negotiations. However, Carney argued that the new tariff deal puts Canada in a strong position compared to other countries. The focus now shifts towards accelerating negotiations on autos, steel, aluminium, and lumber before the USMCA review next year amid ongoing global trade uncertainties.
