Prime Minister Mark Carney said on Friday that Canada will remove many of its retaliatory tariffs on U.S. goods and increase talks with Washington on a new trade and security agreement.
He explained that tariffs on U.S. steel, aluminum, and autos will stay in place for now, but all tariffs on goods covered under the US-Mexico-Canada Agreement (USMCA) will be lifted. “Canada and the U.S. have now re-established free trade for most of our goods,” Carney said, calling the U.S. decision not to impose new tariffs on compliant Canadian products a positive sign.
The announcement gave a boost to the Canadian dollar, which rose 0.5% by early afternoon. Carney also revealed that he spoke with Donald Trump on Thursday and confirmed the tariff decision was linked to restarting talks on a broader trade and security deal.
The move marks a shift in tone for Carney, who campaigned in April on standing firm against U.S. tariffs but has since adopted a more moderate approach. He recently dropped plans for a digital services tax and backed away from threats of more sanctions.
Carney’s softer line could create political challenges at home. His Liberal government holds only a minority in Parliament and depends on opposition parties to stay in power. Conservatives have accused him of giving in too easily to Washington.
The tariffs were first imposed by former Prime Minister Justin Trudeau in 2018, when Canada placed 25% duties on C$30 billion worth of U.S. goods in response to Trump’s trade measures.
