Canada says it will remove retaliatory tariffs on various U.S. goods

Earlier today, Canadian Prime Minister Mark Carney announced that Canada will remove various retaliatory import tariffs on United States goods that are covered under USMCA (United States Mexico Canada Agreement).

This marks a shift in policy compared to the high tensions between the nations going back to when President Trump re-entered the White House in January.

In comments made at a press conference earlier today, Carney said that this move helps to re-establish free trade between the U.S. and Canada, adding that while many retaliatory import tariffs will be removed, tariffs on autos, steel, and aluminum will remain intact.

“In this context and consistent with Canada's commitment to USMCA, I am announcing today that the Canadian government will now match the United States by removing all of Canada's tariffs on U.S. goods specifically covered under USMCA,” said Carney. “Canada and the U.S. have now re-established free trade for the vast majority of our goods,” he added, reiterating that compared with its trading partners, Canadian exports were still subject overall to a low level of U.S. tariffs.”

And he added that Canada’s trade negotiations with the U.S. have been taking place as the U.S. has been in the process of fundamentally transforming all of its trade relationships. The actual U.S. tariff rate on Canadian goods is 5.6%, which Carney said is “well below” the global average, with more than 85% of U.S.-Canada freight being tariff-free.

Last month, President Trump stated on a social media message he sent Carney a letter stating that effective August 1, the U.S. will charge Canada a 35% tariff on products imported into the U.S. from Canada, separate from tariffs on specific sectors. Tariffs placed on Canada by the U.S. currently include: a 25% tariff on non-USMCA goods; a 10% tariff on energy resources and potash; a 50% tariff on steel and aluminum; and a 25% tariff on autos and auto parts.

In the letter to Carney, President Trump said that the U.S. initially imposed tariffs on Canada in an effort to combat the U.S. fentanyl crisis, with Canada subsequently replying in kind with tariffs on U.S. goods imported into Canada. On March 4, Canada implemented 25% tariffs on $30 billion worth of U.S. imports, including consumer and household goods, followed on March 12, with 25% tariffs on $29.8 billion worth of U.S. goods, including steel, aluminum, tools, computers, and other items.