Canada removing retaliatory tariffs on CUSMA-compliant U.S. goods

By Peter Zimonjic, CBC News, RCI

The 35 per cent tariff rate only applies to goods not covered by CUSMA. (Pexels Photo)

Tariffs on U.S. autos, steel and aluminum remain for now

Canada will remove all tariffs on goods from the United States that are covered by the Canada-U.S.-Mexico Agreement (CUSMA) by Sept. 1, Prime Minister Mark Carney announced on Friday.

The prime minister said Canada will maintain its tariffs on steel, aluminum and autos as the Liberal government works with the U.S. to craft a new trading relationship between the two countries.

Carney said that despite the ongoing trade war, and U.S. tariffs on steel, aluminum, autos, copper, lumber and energy, 85 per cent of trade with the U.S. is still tariff-free, which is a better deal than other countries have.

As we work to address outstanding trade issues with the U.S., it is important we do everything we can to preserve this unique advantage for Canadian workers and their families, Carney said.

WATCH | Carney says some retaliatory tariffs will be gone Sept. 1:

A White House official said they welcome the move, calling it long overdue.

The official added that they look forward to continuing discussions with Canada on trade and national security concerns.

Carney first hinted earlier this month that he may drop some of the counter-tariffs on some goods if it would help Canadian industries weather the trade war with the U.S.

U.S. President Donald Trump signed an executive order on July 31, raising tariffs on some Canadian goods to 35 per cent effective at 12:01 a.m. the next day. Canada might have been able to avoid the hike had it managed to strike a new trade deal with the U.S. by the Aug. 1 deadline, but that didn’t happen.

The Trump administration said Canada’s rate was being hiked in response to fentanyl trafficking and Canada’s decision earlier this year to hit back with counter-tariffs.

The Canadian government has imposed retaliatory tariffs on U.S. goods three times since the trade war began, including counter-tariffs on $60 billion worth of U.S. consumer goods and additional tariffs on U.S. autos.

The 35 per cent tariff rate only applies to goods not covered by CUSMA.

First ‘nation-building project’ to be announced soon

Carney referenced his conversation with Trump on Thursday, saying he got assurances from the U.S. president that by removing tariffs on U.S. imports compliant with CUSMA, discussions between the two countries will intensify to address trade challenges in strategic sectors still impacted by tariffs.

Those discussions, Carney said, will happen alongside efforts to prepare for the official review of CUSMA that will happen next year by holding industry consultations starting next month in order to set priorities.

Carney also said his government will focus on strengthening the Canadian economy by expanding trade with other countries, doubling the pace of home-building and making investments in national defence.

Earlier this year, Carney’s government saw the passage of legislation that would streamline approvals for nation-building projects such as highways, railways, ports, airports, pipelines, critical minerals, mines, nuclear facilities and electrical transmission projects.

The Canadian government will soon select the first in a series of new nation-building projects that will connect and transform our economy, he said on Friday.

WATCH | It’s time to ‘stickhandle’ with U.S., Carney says, after dropping gloves early in trade war:

In a statement, the Canadian Federation of Independent Business welcomed Carney’s announcement, calling it a step in the right direction that will take the pressure off Canadian small businesses.

Many small business owners have told us that Canada’s retaliatory measures were almost as damaging as the U.S. tariffs themselves, the CFIB’s Corinne Pohlmann said in a statement.

Pohlmann said that while the announcement provides some relief, Canadian companies have already paid millions of dollars in tariffs, and she urged the federal government to provide some of that revenue to small businesses impacted by the trade war.

In a statement posted on X, Lana Payne, the president of Unifor, the largest private sector union in Canada with more than 300,000 members, said Carney’s move was a mistake.

Walking back counter-tariffs isn’t an olive branch. It only enables more U.S. aggression, she said.

From the start, Unifor has demanded Canada’s leverage be used to defend workers in this trade war, she added. We should not give it away unless the U.S. also drops all punitive tariffs.

This article is republished from RCI.