Canada announced Friday it will lift many of its retaliatory tariffs on U.S. products, marking a key step in easing trade tensions between the two nations.

The move follows a March decision by Canada to impose 25% counter-tariffs on a wide range of U.S. goods in response to U.S. duties on steel and aluminum. However, Canadian Prime Minister Mark Carney confirmed that the 25% tariffs on U.S. autos, steel, and aluminum will remain in place.

Story Highlights (Read Box)

• Canada to remove many retaliatory tariffs on U.S. goods starting Sept. 1

• 25% tariffs on U.S. autos, steel, and aluminum remain in place

• Decision follows Carney-Trump phone call after stalled negotiations

• Move comes ahead of U.S.-Mexico-Canada Agreement review later this year

• White House calls Canada’s decision “long overdue”

• Fentanyl concerns cited as factor in earlier tariff hikes

Carney stated the changes will take effect September 1, adding that Canada currently holds the strongest trade deal among nations working with the U.S.

“As we work intensively with the United States, our focus is squarely on the strategic sectors,” Carney said during a press conference.

A White House official called the decision “long overdue” and emphasized ongoing discussions over trade and national security.

The announcement followed a phone call Thursday between Carney and President Donald Trump—their first conversation since talks broke down before the August 1 tariff deadline. Carney said Trump assured him that removing some tariffs would help restart negotiations.

This development comes as the U.S.-Mexico-Canada Agreement (USMCA) is set for a review later this year.

Canada initially imposed CA$30 billion (US$21.7 billion) in tariffs under former Prime Minister Justin Trudeau after the U.S. introduced its own measures. In July, Trump announced plans to raise tariffs on Canada to 35%, citing Canada’s unwillingness to cooperate and concerns over fentanyl trafficking. U.S. Customs and Border Protection reported seizing 43 pounds of fentanyl at the northern border in 2024 and 58 pounds so far this year.

Carney previously said on X that Canada was committed to reaching a deal with the U.S.

Canada’s decision to lift many retaliatory tariffs signals a shift toward improving trade relations with the U.S., though key duties on autos, steel, and aluminum remain in place. With the U.S.-Mexico-Canada Agreement under review later this year and renewed dialogue between Prime Minister Mark Carney and President Donald Trump, both nations appear focused on stabilizing economic ties while addressing security and strategic concerns.

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