Canada removing retaliatory tariffs on CUSMA-compliant U.S. goods

Canada to Remove Tariffs on U.S. Goods Covered by CUSMA by Sept. 1

Prime Minister Mark Carney announced on Friday that Canada will be removing all tariffs on goods from the United States that are covered by the Canada-U.S.-Mexico Agreement (CUSMA) by Sept. 1. However, the tariffs on steel, aluminum, and autos will remain in place as the Liberal government works on crafting a new trading relationship with the U.S.

Despite the ongoing trade war and U.S. tariffs on various goods, Carney emphasized that 85 per cent of trade with the U.S. is still tariff-free, giving Canadian workers a unique advantage. He stated, “As we work to address outstanding trade issues with the U.S., it is important we do everything we can to preserve this unique advantage for Canadian workers and their families.”

A White House official welcomed the move, calling it “long overdue” and expressing eagerness to continue discussions with Canada on trade and national security concerns.

The decision to remove some counter-tariffs on U.S. goods comes after Carney hinted earlier this month that it may help Canadian industries navigate the trade war with the U.S. U.S. President Donald Trump recently signed an executive order raising tariffs on certain Canadian goods to 35 per cent, citing fentanyl trafficking and Canada’s counter-tariffs as reasons for the hike.

Carney mentioned his conversation with Trump, where assurances were given that discussions between the two countries would intensify to address trade challenges in strategic sectors impacted by tariffs. These discussions will coincide with preparations for the official review of CUSMA next year, with industry consultations beginning next month to set priorities.

Additionally, the Canadian government will focus on strengthening the economy by expanding trade with other countries, increasing home-building, and investing in national defense. Carney also announced plans to select the first of a series of new nation-building projects that aim to connect and transform the Canadian economy.

While the Canadian Federation of Independent Business welcomed Carney’s announcement as a step in the right direction, Unifor, the largest private sector union in Canada, criticized the move, stating that walking back counter-tariffs only enables more U.S. aggression. They emphasized the need to use Canada’s leverage to defend workers in the ongoing trade war.