Prime Minister Mark Carney says Canada is dropping some retaliatory tariffs on American products to match U.S. tariff exemptions for goods covered under the Canada-United States-Mexico Agreement.
After meeting with his cabinet, Carney said at a news conference Friday that the decision will take effect on Sept. 1, 2025.
Carney had a call with U.S. President Donald Trump Thursday, and Carney confirmed that Trump assured him the move would help kickstart trade negotiations with the U.S.
Carney said Canada and the U.S. have re-established free trade for the vast majority of goods. He said Canada will retain tariffs on steel, aluminum and autos as it works with the U.S. to resolve issues.
"Canada currently has the best trade deal with the United States," Carney said, noting that the U.S. average tariff rate on Canadian goods is 5.6 per cent and remains the lowest among all its trading partners. "And while it's different from what we had before, it is still better than that of any other country."
A White House official said in a statement that the U.S. welcomes the Canada's move, calling it "long overdue."
The official said they looked forward to "continuing our discussions with Canada on the administration's trade and national security concerns."
Carney says the Canadian government will begin its preparations for the CUSMA review process due next year by launching consultations starting next month. He said the review process can take anywhere between six and 18 months.
Canada imposed 25 per cent tariffs on a long list of American goods in March, including oranges, alcohol, clothing and shoes, motorcycles and cosmetics.
A readout from Carney's office after Thursday's call with Trump described the meeting as "productive and wide-ranging."
It said the leaders talked about trade challenges and the new economic and security relationship between the two countries.
This report by The Canadian Press was first published Aug. 22, 2025.
