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

Canada will remove all tariffs on goods from the United States that are covered by the Canada-U.S.-Mexico Agreement (CUSMA) by Sept. 1, Prime Minister Mark Carney announced on Friday.

The prime minister said Canada will maintain its tariffs on steel, aluminum and autos as the Liberal government works with the U.S. to craft a new trading relationship between the two countries.

Carney said that despite the ongoing trade war, and U.S. tariffs on steel, aluminum, autos, copper, lumber and energy, 85 per cent of trade with the U.S. is still tariff-free — which is a better deal than other countries have. 

“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,” Carney said.

WATCH | Carney says some retaliatory tariffs will be gone Sept. 1: 

Carney announces Canada will remove retaliatory tariffs on most U.S. goods

Prime Minister Mark Carney announced Canada will remove retaliatory 25 per cent tariffs on CUSMA-compliant U.S. goods.

“We want to be very good to Canada. I like Carney a lot. I think he’s a good person and we had a very good talk yesterday,” U.S. President Donald Trump said in the Oval Office Friday.

Carney first hinted earlier this month that he may drop some of the counter-tariffs if it would help Canadian industries weather the trade war with the U.S.

Trump signed an executive order on July 31, raising tariffs on some Canadian goods to 35 per cent effective at 12:01 a.m. the next day. Canada might have been able to avoid the hike had it managed to strike a new trade deal with the U.S. by the Aug. 1 deadline, but that didn’t happen.

The Trump administration said the change was in response to fentanyl trafficking and Canada’s decision earlier this year to hit back with counter-tariffs.  

The Canadian government imposed retaliatory tariffs on U.S. goods three times since the trade war began, including counter-tariffs on $60 billion worth of U.S. consumer goods and additional tariffs on U.S. autos, steel and aluminum.

The 35 per cent tariff rate only applies to goods not covered by CUSMA.

First ‘nation-building project’ to be announced soon

Carney referenced his conversation with Trump on Thursday, saying he got assurances from the U.S. president that by removing tariffs on U.S. imports compliant with CUSMA, discussions between the two countries will “intensify” to address “trade challenges in strategic sectors” still impacted by tariffs. 

Those discussions, Carney said, will happen alongside efforts to prepare for the official review of CUSMA that will happen next year by holding industry consultations starting next month in order to set priorities. 

Dominic LeBlanc, the minister responsible for Canada-U.S. trade, suggested to CBC’s Power & Politics that walking back the retaliatory tariffs will help ease tensions ahead of the CUSMA review.

WATCH | LeBlanc says Canada has ‘lots of cards’ in negotiations with U.S.: 

LeBlanc says Canada has ‘lots of cards’ in negotiations with U.S.

Prime Minister Mark Carney announced on Friday that Canada would be dropping retaliatory tariffs against non-CUSMA-compliant American imports effective Sept. 1. But critics say Canada has given up some leverage in doing so. The minister responsible for Canada-U.S. trade, Dominic LeBlanc, joins Power & Politics to discuss.

“We have to get to that conversation in the most coherent posture possible and the prime minister’s decision today very much lines up in that way,” LeBlanc told guest-host Karina Roman.

Carney also said his government will focus on strengthening the Canadian economy by expanding trade with other countries, doubling the pace of home-building and making investments in national defence.

Earlier this year, Carney’s government saw the passage of legislation that would streamline approvals for nation-building projects such as highways, railways, ports, airports, pipelines, critical minerals, mines, nuclear facilities and electrical transmission projects.

“The Canadian government will soon select the first in a series of new nation-building projects that will connect and transform our economy,” he said on Friday.

WATCH | It’s time to ‘stickhandle’ with U.S., Carney says: 

It’s time to ‘stickhandle’ with U.S., Carney says, after dropping the gloves early in trade war

Asked if Canada is now ‘elbows down,’ Prime Minister Mark Carney says the country has ‘the lowest tariff rate on average’ after showing it’s willing to fight. But he says this is a ‘big game’ that has now moved to a different stage.

Conservative Leader Pierre Poilievre criticized Carney’s decision, accusing the prime minister of making “generous concessions” to the U.S. president without getting anything in return. 

“Today we learned that it is yet another capitulation and climb-down by Mark Carney, his elbows have mysteriously gone missing,” he said Friday.

Poilievre says either Carney has to admit that he was wrong all along or that he lied during the election campaign when he said he was the man who could get the best deal with Trump.

“He needs to explain which of those two things it is,” Poilievre said. 

WATCH | Poilievre slams Carney’s negotiating skills: 

Poilievre says Carney ‘has not thrown one elbow since he took office’

Speaking after Prime Minister Mark Carney announced the removal of some retaliatory tariffs on U.S. goods, Conservative Party Leader Pierre Poilievre said Carney has broken his biggest election campaign promise.

The Conservative leader went on to say that his objective is to have all tariffs between Canada and the U.S. removed and he would have demanded that from Trump if he was prime minister.

“I would have gone to the president, respectfully, and said: ‘You remove your tariffs, we remove ours. Let’s sign an agreement that restores the great free-trading relationship that our two countries had for decades,'” he said.

Unifor and Canadian Federation of Independent Business weigh in

Ontario Premier Doug Ford said he spoke with Carney after the announcement, telling him Canada needs an agreement with the U.S. that provides relief to the steel, auto, forestry and copper industries. 

“If the federal government can’t achieve that, they need to hit back hard against U.S. tariffs and provide additional supports for the workers and businesses in these sectors,” Ford said in a statement.

The Canadian Federation of Independent Business (CFIB) welcomed Carney’s announcement in a statement, calling it a “step in the right direction” that will “take the pressure off Canadian small businesses.”

“Many small business owners have told us that Canada’s retaliatory measures were almost as damaging as the U.S. tariffs themselves,” the CFIB’s Corinne Pohlmann said in a statement. 

Pohlmann said that while the announcement provides some relief, Canadian companies have already paid millions of dollars in tariffs, and she urged the federal government to provide some of that revenue to small businesses impacted by the trade war. 

In a statement posted on X, Lana Payne, the president of Unifor, the largest private sector union in Canada with more than 300,000 members, said Carney’s move was a mistake.

“Walking back counter-tariffs isn’t an olive branch. It only enables more U.S. aggression,” she said. 

“From the start, Unifor has demanded Canada’s leverage be used to defend workers in this trade war,” she added. “We should not give it away unless the U.S. also drops all punitive tariffs.” 

This week, Cross Country Checkup is asking: Is Mark Carney playing it smart or selling Canada short by lifting many tariffs on U.S. goods? What grade are you giving him on managing Donald Trump? Leave your comment here and we may read it or call you back for our show on Sunday.