Canada Eases Retaliatory Tariffs on U.S. Goods While Retaining Key Levies

Sat Aug 23 2025 08:01:25 GMT+0300 (Eastern European Summer Time)
Canada Eases Retaliatory Tariffs on U.S. Goods While Retaining Key Levies

Canada's decision to relax certain trade tariffs signals a shift in relations with the U.S. in the wake of ongoing negotiations.


Canada is set to drop many of its retaliatory tariffs against the U.S. starting September 1, while maintaining levies on steel, aluminum, and automotive sectors, aiming to facilitate smoother trade negotiations.

In a significant development, Canada has announced that it will ease several retaliatory tariffs on U.S. imports, according to Prime Minister Mark Carney's statement on Friday. This decision is a response to ongoing trade discussions between Canada and the United States, which saw a missed deadline for a new trade agreement. Carney revealed that these tariff reductions would apply to compliant goods under the U.S.-Mexico-Canada Agreement (USMCA), but levies on autos, as well as steel and aluminum, will remain in place.

Initially, Canada imposed a 25% surcharge on around C$30 billion (approximately $21.7 billion) worth of U.S. goods, affecting a range of products from orange juice to washing machines, in retaliation for U.S. tariffs on Canadian exports, which reached up to 35% on certain goods. Carney asserted that this move to match U.S. tariffs on compliant goods would restore free trade for the majority of products exchanged between the two nations, effective September 1.

In response to Canada's announcement, the White House welcomed the decision, deeming it "long overdue," and expressed eagerness to further engage in trade and national security discussions. Despite the easing of certain tariffs, a significant portion of Canada’s tariffs against the U.S. remains in place, particularly affecting important sectors like automotive manufacturing and metals.

Polling indicates strong support among Canadians for the continuation of retaliatory tariffs, a stance that Carney, who won an election this past April, has leveraged to advocate for a robust negotiating position with the Trump administration. He emphasized that Canada retains a competitive edge with lower tariff rates due to the USMCA, averaging around 5.6%, significantly lower than the global average of 16% for other nations.

As negotiations progress, the focus for Canada will center on resolving contentious issues in the automotive, metals, and lumber sectors, especially with a review of the USMCA on the horizon next year. The United States has maintained its protective tariffs, imposing a 50% tariff on steel and aluminum imports from various countries, except the UK, further complicating international trade relations.

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