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Canada announced on Friday that it will remove many of the retaliatory tariffs imposed on U.S. goods as a sign of goodwill aimed at resuming trade talks that have stalled.
Canadian tariffs on goods that are compliant with the U.S.-Mexico-Canada Agreement (USMCA) will be lifted under the move, while tariffs imposed on U.S. autos, steel and aluminum will remain in effect for now.
“In this context and consistent with Canada’s commitment to USMCA, I am announcing today that the Canadian government will now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under USMCA,” Canadian Prime Minister Mark Carney said at a press conference in Ottawa.
“Canada and the U.S. have now re-established free trade for the vast majority of our goods,” Carney added. He also emphasized that compared with trading partners, Canadian exports are still subject to a relatively low level of U.S. tariffs.
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Canadian Prime Minister Mark Carney and President Donald Trump are looking to restart trade negotiations after dropping retaliatory tariffs. (Chip Somodevilla/Getty Images / Getty Images)
“Canada currently has the best trade deal with the United States. And while it’s different from what we had before, it’s still better than that of any other country,” Carney said.
Carney said that President Donald Trump told him the move would kick-start trade negotiations that have stalled.
“We welcome this move by Canada, which is long overdue,” a White House official told FOX News. “We look forward to continuing our discussions with Canada on the Administration’s trade and national security concerns.”
The Canadian government in late June scrapped plans for a digital services tax that sparked outrcry from U.S. companies, particularly in the tech sector, in an effort to remove a potentially thorny issue from trade negotiations.
The U.S. and Canada have a deep trading relationship. (Photo by Jason Redmond/AFP via Getty Images / Getty Images)
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Last month, Carney and his government also dropped talk of further escalating tariffs on the U.S. if the two countries weren’t able to reach a deal by Aug. 1.
The U.S. and Canada have consistently been each other’s largest or second-largest trading partners, with the Office of the U.S. Trade Representative noting that Canada was the leading destination for U.S. exports in 2024, and the third-largest source of imported goods. Canada exported over three-quarters of its goods to the U.S. and nearly half of its imports came from the U.S.
The North American auto industry’s supply chain is interwoven between the U.S. and Canada. (Photographer: Emily Elconin/Bloomberg via Getty Images / Getty Images)
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The main U.S. exports to Canada are vehicles, machinery and energy products, along with about $30 billion in agricultural goods.
Canada’s primary exports to the U.S. are energy products and vehicles, plus more than $40 billion in agricultural goods.
Fox News’ Patrick Ward and Reuters contributed to this report.
