Canada lifts most tariffs on US goods

Canada eases retaliatory tariffs after missing a deadline, signaling a shift in US-Canada trade talks.

Canada to drop many of its retaliatory tariffs on the US

Canada will lift most retaliatory tariffs on United States goods, effective September 1, ending levies on a broad range of products that had been taxed at 25 percent. Tariffs on autos, steel, and aluminium will remain for now. Prime Minister Mark Carney said the move brings Canada in line with the US-Mexico-Canada free trade framework for goods that comply with USMCA. The White House welcomed the decision as long overdue and said negotiations will continue with a focus on trade and national security.

The shift comes after Ottawa and Washington spoke by phone for the first time since missing a self-imposed deadline to seal a broader agreement. The United States has its own tariffs in place on steel, aluminium, and copper, while Canada has pegged duties on US steel, aluminium, and autos. Carney noted Canada’s overall tariff rate on many goods is around 5.6 percent, lower than the global average, and stressed the goal of preserving advantages for Canadian workers and businesses as talks advance.

The move signals a strategic pivot from punitive tariffs toward engagement within the USMCA framework. By removing barriers on most goods, Canada aims to reduce costs for manufacturers and shoppers while keeping leverage on autos, steel, and lumber. The decision also tests Canada’s stance of a firm but cooperative negotiation style, a contrast to the earlier confrontational posture that characterized parts of the trading dispute.

Yet questions remain about how durable the thaw will be. Domestic critics may push back if concessions appear selective or temporary, and markets will watch how the US uses the ongoing talks to secure broader protections and concessions on national security and supply chains.

Highlights

The next rounds of talks will reveal how much leverage remains on both sides.