Canada’s Prime Minister Mark Carney listens whereas touring the Royal Canadian Navy torpedo restoration vessel Sikanni on the Canadian Forces Maritime Experimental and Check Ranges, in Nanoose Bay, British Columbia, Aug. 4.
Darryl Dyck/The Canadian Press by way of AP
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Darryl Dyck/The Canadian Press by way of AP
TORONTO — Canada is dropping retaliatory tariffs to match U.S. tariff exemptions for items lined underneath the United States-Mexico-Canada commerce pact, Prime Minister Mark Carney introduced Friday.
Carney mentioned Canada will embrace the carve-out that the U.S. has on Canadian items underneath the 2020 free commerce deal that shields the overwhelming majority of products from the punishing duties.
“Canada at present has the most effective commerce take care of the USA. And whereas it is totally different from what we had earlier than, it is nonetheless higher than that of some other nation,” Carney mentioned.
Carney and U.S. President Donald Trump spoke on the cellphone Thursday and Carney met together with his Cupboard on Friday earlier than making the announcement.
The transfer is designed to reset commerce talks between the 2 international locations. The USMCA is up for evaluation in 2026, and Carney referred to as the commerce pact a novel benefit for Canada at a time when it’s clear that the U.S. is charging for entry to its market.
Carney mentioned the dedication of the U.S. to the core of USMCA means the U.S. common tariff charge on Canadian items stays one among its lowest, and that over 85% of Canada-U.S. commerce continues to be freed from tariffs.
Canadian and Mexican corporations can declare preferential therapy underneath the USMCA.
Former Prime Minister Justin Trudeau initially placed on retaliatory tariffs in response to U.S. tariffs, however earlier than the U.S. tariffs had been utilized the Trump administration exempted items lined by the free commerce deal.
Most imports from Canada and Mexico are nonetheless protected by the USMCA, however U.S. Commerce Secretary Howard Lutnick has mentioned, “I feel the president is totally going to renegotiate USMCA.”
Preserving the free commerce pact can be important for Canada and Mexico. Greater than 75% of Canada’s exports go to the U.S. whereas greater than 80% of Mexico’s exports go there.
Trump has introduced some sector specific-tariffs that do apply for Canada regardless of the USMCA — referred to as 232 tariffs — that are having an impression on the Canadian economic system. There’s a 50% tariff on metal and aluminum imports, for instance.
“Canada and the USA have reestablished free commerce for the overwhelming majority of our items. Canada will retain our tariffs on metal, aluminum and autos as we work intensivily to resolve the problems there,” Carney mentioned.
Carney beforehand rescinded Canada’s plan to tax U.S. know-how companies after Trump mentioned he was suspending commerce talks with Canada over these plans, which he referred to as “a direct and blatant assault on our nation.”
The prime minister disputed any notion that Canada is appeasing Trump, noting that Canada is matching what the U.S. is doing.
“The president and I had a protracted dialog,” Carney mentioned. “There’s a evaluation of the free commerce settlement within the spring. We’re beginning our preparations.”
Lana Payne, president of Unifor, Canada’s largest personal sector union, characterised Carney’s announcement as Canada backing down, and mentioned the nation should not again down until the U.S. drops all punitive tariffs.
“Trump’s assaults on auto, metal, aluminum, and forestry sectors are hurting Canadian employees in actual time,” she posted on social media. “Strolling again counter-tariffs is not an olive department. It solely permits extra U.S. aggression.”
