Posted on 08/22/25
| News Source: WSJ
Canada said it would remove its 25% tariff on about half of the U.S. goods it has targeted since March as the country attempts to reset its trading relationship with the U.S.
However, Prime Minister Mark Carney said 25% duties on U.S. steel, aluminum and automobiles would remain in place. Overall, the decision affects about $21 billion of U.S. exports to Canada, on goods such as orange juice, peanut butter, wine, spirits, beer, appliances and motorcycles. Tariffs on those goods come off as of Sept. 1.
The move comes the day after Carney and President Trump spoke for the first time since the two countries failed to reach a trade deal before an Aug. 1 deadline. At a press conference Friday, Carney said that by dropping the tariffs, the U.S. and Canada will now treat the bulk of their trade equally. The U.S. exempts Canadian imports from a 25% tariff so long as they comply with the terms in the U.S.-Mexico-Canada free trade treaty, known as USMCA. Canada will do the same with U.S. imports.
Carney said he had a lengthy conversation with the president, and said Trump assured him that dropping the bulk of the tariffs would help bilateral trade talks.
“Canada currently has the best trade deal with the United States. While it is different from what we had before, it is still better than that of any country,” Carney said, adding the U.S. average tariff on Canadian imports sits at about 5.6%. “Nobody has a deal with the United States that they used to have.”
A White House official said the administration welcomed Canada’s decision, “which is long overdue.” At a White House event, Trump said he would speak to Carney again in the near future. “We want to be very good to Canada. I like Carney a lot, I think he’s a good person,” he said.
Canada is the U.S.’s third-largest two-way trading partner, after the European Union and Mexico. Elevated trade uncertainty has weighed on Canadian business activity, with companies delaying or scrapping investment and hiring plans.