Canada reportedly announced Friday it will roll back nearly half of the tariffs it has imposed on U.S. imports, easing tensions with Washington after months of strained trade relations.
The move, affecting roughly $21 billion of American exports, reflects what officials described as a reset in the relationship with the United States under President Donald Trump.
Prime Minister Mark Carney said the 25 percent duties Canada levied in March on a wide range of consumer products — including orange juice, peanut butter, wine, spirits, beer, appliances and motorcycles — will be removed on Sept. 1.
But he made clear that tariffs on politically sensitive industries such as U.S. steel, aluminum and automobiles would remain.
The announcement came a day after Carney and Trump held their first direct conversation since the two countries missed an Aug. 1 deadline to finalize a broader trade deal.
According to Carney, the two leaders spoke at length about repairing ties, with Trump assuring him that lifting tariffs would help improve the climate for negotiations.
“Canada currently has the best trade deal with the United States. While it is different from what we had before, it is still better than that of any country,” Carney told reporters.
He noted that U.S. tariffs on Canadian imports now average about 5.6 percent, remarking that “nobody has a deal with the United States that they used to have.”
At the White House, administration officials welcomed Canada’s retreat. A senior aide said the move was “long overdue.” Trump, speaking at an event, praised Carney personally. “We want to be very good to Canada. I like Carney a lot, I think he’s a good person,” the president said, adding that the two would speak again soon.
Canada, America’s third-largest two-way trading partner after the European Union and Mexico, has seen business investment and hiring plans slow under the uncertainty of Carney’s earlier trade brinkmanship.
Now, with most tariffs lifted, his government is shifting its attention to shoring up industries still burdened by U.S. sectoral duties, including steel, aluminum, automobiles and lumber, while preparing for Washington’s formal review of the U.S.-Mexico-Canada Agreement (USMCA) next year.
Yet Carney’s reversal underscores how isolated Canada became after declining to meet Trump’s earlier deadline. It is the only G7 nation that failed to secure a deal, while allies such as the European Union, Japan and South Korea moved quickly to strike agreements.
“Canada retaliating alone wasn’t working,” acknowledged Brian Clow, a former senior adviser on U.S.-Canada relations under Prime Minister Justin Trudeau. “For retaliation to work, the world needed to stand together and stand up to Trump. That didn’t happen so here we are.”
Trade experts suggested Carney had little choice but to fold. Mark Warner, a Canadian and U.S. trade lawyer, said the prime minister had “read the writing on the wall,” noting that Mexico avoided confrontation and instead secured a 90-day extension at the Aug. 1 deadline. “With Trump, retaliation is a nonstarter,” Warner said, warning that Canada’s insistence on maintaining some tariffs could put its USMCA exemptions at risk.
U.S. Ambassador Pete Hoekstra also cautioned recently that Ottawa’s tariff policies and hesitancy to embrace U.S. goods “threaten the future of” USMCA.
For Trump, the Canadian climbdown validates his tougher trade posture. For Carney, it marks a retreat from his earlier promise that Canada could go it alone against Washington’s tariffs — a promise that, by his own decision, no longer stands.
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