Canada to Lift Retaliatory Tariffs on Most U.S. Goods in Bid to Restart Trade Talks

OTTAWA – The Canadian government announced Friday it will remove the majority of its retaliatory tariffs on American goods, a move aimed at de-escalating the ongoing trade dispute and setting the stage for renewed negotiations with the United States

Prime Minister Mark Carney stated that starting September 1, Canada will align its trade policy with the U.S. and remove all tariffs on goods that are covered under the Canada-United States-Mexico Agreement (CUSMA). The decision follows a recent phone call between Carney and U.S. President Donald Trump, who has expressed a desire to “reset” trade discussions.

"Canada and the United States have re-established free trade for the vast majority of our goods," Carney told reporters, emphasizing that this decision "matches" the U.S. exemption for CUSMA-compliant Canadian products.

The trade war began earlier this year when the U.S. imposed a 25% tariff on most Canadian and Mexican imports, citing concerns over a trade deficit, illegal immigration, and fentanyl trafficking. In response, Canada retaliated with its own 25% tariffs on a wide range of American consumer products, including oranges, clothing, and cosmetics.

While the new policy lifts those tariffs, Canada will maintain its punitive duties on American steel, aluminum, and autos. Carney clarified that these strategic sectors will be the central focus of future negotiations, particularly with the CUSMA agreement set for a formal review in 2026.

The prime minister defended the move as a pragmatic approach to a changing global trade landscape. "Canada currently has the best trade deal with the United States. While it's different from what we had before, it is still better than that of any other country," Carney said, noting that more than 85% of bilateral trade remains tariff-free.

The decision has drawn mixed reactions across the country. The Canadian Federation of Independent Business (CFIB) welcomed the announcement, stating that the retaliatory tariffs were hurting Canadian small businesses and that the change would "take some of the pressure off."

However, opposition leaders have criticized the move as a "capitulation." Conservative Party Leader Pierre Poilievre called it "another climb-down" by the Carney government, arguing that Canada should not have removed its tariffs without first securing a similar concession from the U.S. on all punitive duties.

Carney, who has previously used a hockey analogy to describe his "elbows up" approach to the U.S., maintained that the game has simply moved to a different stage, where the focus will now be on the "strategic sectors" that continue to be impacted.