Canada to Lift Most Retaliatory Tariffs as Trade Tensions with US Ease

Canada has announced plans to remove most retaliatory tariffs against the United States, marking a major step toward easing the trade war that has strained cross-border relations for years.

Prime Minister Mark Carney confirmed on Friday that Ottawa will drop tariffs in sectors where the US has granted exemptions under the US-Mexico-Canada Agreement (USMCA). While tariffs on sensitive industries such as steel, aluminium, and automobiles will remain, most Canadian goods will now be exempt.

“In this context, and consistent with Canada’s commitment to USMCA, the Canadian government will now match the United States by removing all of Canada’s tariffs on US goods specifically covered under USMCA,” Carney announced, adding that the new policy will take effect on September 1.

The move comes after Washington clarified that it will not impose new duties on Canadian products that fall under the trade pact. Carney, who took office in April following voter backlash against former US tariffs, acknowledged that trade integration may never fully return to pre-dispute levels but stressed that Canada has secured the best possible deal under current circumstances.

The Trump administration welcomed the decision, with a White House spokesperson calling it “long overdue” and expressing optimism for continued dialogue on trade and national security.

Facing criticism that he had backed down despite campaign promises of a tough stance—symbolized by his “elbows up” hockey-inspired slogan—Carney insisted Canada is acting pragmatically.

“Canada currently has the best trade deal with the United States,” he said. “While it’s different from what we had before, it’s still stronger than that of any other country.”