Ottawa, August 22, 2025 – Canada will soon roll back many of the retaliatory tariffs it imposed on American products, Prime Minister Mark Carney announced on Friday, signaling a step toward easing trade tensions with Washington.
The move, which takes effect September 1, will lift tariffs on a wide range of U.S. goods covered under the U.S.–Mexico–Canada Agreement (USMCA). However, duties on steel, aluminum, and automobiles will remain in place for now as Canada seeks leverage in ongoing sector-specific talks.
“This decision restores free trade for the vast majority of goods between our countries and reflects our obligations under USMCA,” Carney said during a press briefing in Ottawa. He added that the rollback “opens the door to renewed cooperation” after months of strained relations.
Talks with Trump
The announcement follows a recent phone call between Carney and U.S. President Donald Trump, during which both leaders discussed ways to revive stalled trade negotiations. Washington welcomed the decision, with a White House official calling it “long overdue” and a positive sign for future talks.
Markets reacted quickly. The Canadian dollar strengthened about 0.5%, trading at roughly C$1.3837 per U.S. dollar by midday.
Political Balancing Act
At home, the move is already drawing political fire. Opposition Conservatives accused Carney of backing down too soon in the face of U.S. pressure, arguing that Canada gave away its bargaining power. Carney countered that maintaining tariffs on steel, aluminum, and autos ensures Canada still holds leverage in upcoming negotiations.
The prime minister also pointed to earlier concessions, such as shelving a planned digital services tax and dropping threats of further trade retaliation, as part of a broader strategy to keep talks alive.
Preparing for USMCA Review
Carney stressed that the government remains focused on the upcoming review of USMCA, which could begin as early as September and take up to 18 months. He described the trade pact as “the best deal any country has with the United States,” even if some adjustments are needed.
From Confrontation to Cooperation
The rollback marks a shift from Carney’s earlier, more combative stance on tariffs. His predecessor, Justin Trudeau, imposed duties of up to 25% on about C$30 billion worth of U.S. goods in March, following Trump’s tariff hikes. Carney initially expanded those measures after taking office but has since begun dialing them back.
For Canadian businesses, particularly exporters and importers caught in the crossfire, the announcement offers relief. For Carney, it reflects a delicate balancing act: easing tensions with the U.S. while maintaining enough pressure to protect key domestic industries.
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