Trade truce? Canada removes retaliatory tariffs on most US goods starting September

Canada tariffs: Canada took a big step to ease trade tensions with the United States on Friday by lifting many of the retaliatory tariffs it had imposed earlier this year, as per a report. Starting from September 1, a wide range of American products will no longer face Canada’s 25% counter-tariffs, though tariffs on US autos, steel, and aluminum will remain for now, according to a CNBC report.

Why Had Canada Imposed Tariffs on US Products

The tariffs on a big list of American products that fall in line with the North American trade deal, had been Canada’s response to the United States imposing a 25% duty on steel and aluminum, sparking a trade standoff between the two neighbors, as per the report.

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Canada Now Focuses on Strategic Sectors in US Trade Relations

Canadian prime minister Mark Carney, speaking at a press conference, shared that he believes Canada has the best trade deal out of all of the countries working with the US, as reported by CNBC. The prime minister said, “As we work intensively with the United States, our focus is squarely on the strategic sectors,” as quoted in the report.

Carney also revealed the US president had assured him that removing the retaliatory tariffs will kick-start negotiations between the two countries, according to the CNBC report.

His decision comes as the US-Mexico-Canada Agreement, which Trump negotiated during his first term, is scheduled to undergo a review later this year, according to the report.

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Donald Trump and Mark Carney Reconnect

Canada’s move of dropping most of its counter-tariffs comes after a phone call between Carney and US president Donald Trump, the first known conversation between the both the leaders since negotiations broke down ahead of the August 1 tariff deadline, as reported by CNBC.

As per a readout of the Thursday's call from Carney’s office, the conversation between them was described as “productive and wide-ranging,” with both leaders agreeing to continue talks soon, according to the report.

US Responds to Canada’s Tariff Rollback

While from the US side, a White House official pointed out that Canada’s move was “long overdue," with the the official saying, “We look forward to continuing our discussions with Canada on the Administration’s trade and national security concerns,” as quoted by the CNBC report.

FAQs

Why is Canada removing tariffs on US products?
Canada wants to ease trade tensions and focus on key strategic industries by rolling back some retaliatory tariffs, as per the CNBC report.

Did Trump and Carney talk on call?
Yes, Prime Minister Carney and President Trump had a phone call described as “productive and wide-ranging.”