Tariffs Rolled Back Under USMCA Framework
Prime Minister Mark Carney announced that Canada will remove most retaliatory tariffs on U.S. goods, restoring near full free trade between the two countries under the USMCA agreement. The rollback excludes U.S. autos, steel, and aluminum, which remain under Canadian tariffs. Carney emphasized that this move matches Washington’s recent decision not to impose duties on Canadian exports compliant with the trilateral trade pact.
Talks Toward a New Trade and Security Relationship
Carney confirmed that Canada is intensifying discussions with the United States to shape a new trade and security arrangement. While negotiations have been ongoing for months, officials admit that a deal is still distant. Nonetheless, Carney said he received assurances from President Donald Trump that lifting tariffs would help advance talks. The Canadian leader framed the decision as a strategic shift toward moderation, after initially promising a tougher stance during his election campaign.
Political and Economic Impact
The announcement strengthened the Canadian dollar, which rose 0.5% following the news. Economically, the decision reduces costs for industries reliant on U.S. imports, but politically it may prove challenging. Carney’s minority Liberal government depends on opposition support in Parliament, and Conservatives have already accused him of adopting too soft a position with Washington. The shift also contrasts with his predecessor Justin Trudeau’s hardline policy, which included sweeping 25% tariffs on U.S. goods in retaliation for Trump’s original duties.
U.S. Response and Next Steps
The White House welcomed Canada’s decision, calling it “long overdue,” while reiterating its commitment to resolve trade and national security concerns. Canada and China had been the only nations to respond to Trump’s tariffs with broad countermeasures, a stance that strained relations. Carney has since dropped other contentious measures, including a proposed digital services tax, signaling a more conciliatory tone. Looking ahead, Ottawa’s strategy appears focused on stability and deeper cooperation, even as critical sectors like autos and metals remain under protectionist measures.