Written by The Banking Post
Prime Minister Mark Carney on Friday announced Canada will lift many of its retaliatory tariffs on US goods, signaling a shift toward a more moderate trade stance with Washington.
Speaking at a press conference, Carney said tariffs on steel, aluminum and autos would remain in place but confirmed that Canada would scrap duties on goods covered by the US-Mexico-Canada Agreement (USMCA). The move follows Washington’s assurance that it would not impose new tariffs on Canadian exports compliant with the trade pact.
“Canada and the US have now re-established free trade for the vast majority of our goods,” Carney said.
The announcement buoyed the Canadian dollar and marked another step in months-long talks between Ottawa and Washington on a broader economic and security framework, though officials caution a final deal remains distant.
Carney spoke with US President Donald Trump on Thursday. When asked if Trump’s signal on lifting tariffs prompted Canada’s move, Carney replied, “Yes.” Trump later described the decision as a “nice thing,” adding, “We are working on something. We want to be very good to Canada. I like Carney a lot.”
Carney, who came to power in April vowing to stand firm against US tariffs, has since adopted a more conciliatory approach. In June, he scrapped a planned digital services tax opposed by US tech firms, and in July dropped threats of fresh sanctions.
Still, Ottawa is holding firm on its 25% duties on US steel and aluminum, introduced after Trump doubled tariffs on Canadian metals earlier this year. Those measures follow earlier retaliation under former Prime Minister Justin Trudeau, who imposed tariffs on C$30 billion worth of US goods in 2023.
Carney defended his approach, arguing that Canada currently enjoys the best terms of trade with the US compared to other countries. “Let’s be clear, we have the best deal of anyone in the world right now,” he said.
The focus, he added, will now shift to securing relief for key sectors still under pressure, including steel, aluminum, autos and lumber, as well as preparing for the 2026 review of the USMCA trade deal.
Business leaders welcomed the easing of tariffs but warned that a strong renewal of the pact must be Canada’s top priority. “While there is more work to be done in strategic sectors, Canada’s priority must be the successful review and renewal of the US-Mexico-Canada Agreement,” said Goldy Hyder, president of the Business Council of Canada.
The move could spark political tension at home. Carney’s Liberals hold only a minority in Parliament and depend on opposition support. Conservative leader Pierre Poilievre has accused Carney of going soft on Trump, setting the stage for a heated debate as the next phase of negotiations begins.
