Canada will drop its counter-tariffs on some American goods in the coming days, Mark Carney has said, as the country’s prime minister looks to end a protracted trade war with longtime ally the United States.
From 1 September, the Canadian government will remove some levies on US goods that comply with the North American free-trade pact, a move meant to “match” how the White House treated Canadian goods. Levies on steel, aluminum and autos will remain in place.
The announcement comes one day after Carney and Donald Trump spoke on the phone.
In recent months, the US has upended global trade as it seeks to bring manufacturing jobs back and sign more favourable deals with trading partners.
Carney said despite the global turmoil and American tariffs on Canadian steel, aluminum, autos, copper, lumber and energy, 85% of Canada’s trade with its southern neighbour was tariff-free.
“Let’s be absolutely clear: Canada currently has the best trade deal with the United States, and while it’s different from what we had before, it is still better than that of any other country,” he said. “As we work to address outstanding trade issues with the US, it is important we do everything we can to preserve this unique advantage for Canadian workers and their families.”
When Trump’s aggressive tariff plans sparked a trade war earlier this year, relations between the two nations chilled. Washington and Ottawa had long been positioned as close allies on trade and defense.
Canada has imposed retaliatory tariffs on US goods three times. Those counter-tariffs covered $60bn worth of consumer goods. Canada’s federal government also imposed tariffs on American-made cars. The governing Liberal party has also pledged government support for sectors disproportionately affected by American economic protectionism, and in an effort to reduce Canada’s reliance on the US as a trading partner.
Despite hints of a detente in recent weeks, including talks between Carney and Trump this week, Canada and the US failed to reach a set of terms by Trump’s 1 August deadline that would reshape a longer-standing relationship. In late July, Carney said Canada was unlikely to convince Trump, who sees tariffs as a useful and powerful cudgel, to drop all levies on Canadian goods.
In a statement, the White House called the move “long overdue” and said Carney’s overture paved the way for “continuing our discussions with Canada on the administration’s trade and national security concerns”.
