- Canada will eliminate several retaliatory tariffs on U.S. products as a gesture toward President Donald Trump.
- The official announcement is expected after Prime Minister Mark Carney meets with his cabinet.
- Key U.S. goods like automobiles, steel, and aluminum will remain subject to tariffs.
- Canada’s move follows earlier tariff increases in response to U.S. trade measures announced in April.
- The change comes ahead of a review of the US-Mexico-Canada Agreement (USMCA).
Canada is set to remove a number of retaliatory tariffs on products imported from the United States, according to Bloomberg. The decision, which aims to ease trade tensions, will likely be announced on Friday following a meeting of Prime Minister Mark Carney and his cabinet.
Bloomberg reported that the revised policy is expected to bring Canada’s tariff regime closer to U.S. measures. In April, Canada imposed new tariffs in response to sweeping U.S. trade policies. Those tariffs targeted a range of American items, including technology products and selected vehicles made in the United States.
Some goods will no longer face the 25% import duty, provided shipments comply with the rules of the US-Mexico-Canada Agreement (USMCA). However, key sectors such as U.S. automobiles, steel, and aluminum will continue to be affected by tariffs. Bloomberg noted that the announcement follows a recent phone call between Prime Minister Carney and President Trump, their first public conversation in several weeks.
Earlier this year, the Canadian government introduced a digital services tax, intended to collect about $3 billion from U.S. technology companies. The tax is a 3% levy on annual digital revenue above $20 million from Canadian users, with retroactive payments going back to 2022. This policy has impacted major social media, e-commerce, and digital advertising platforms.
Canada’s counter-tariffs have not caused significant inflation, with inflation rising 1.7% year-over-year in July, according to Statistics Canada. This remains below the central bank’s 2% inflation target. The planned changes in tariffs come as both countries prepare for the upcoming review of the USMCA.
Consumer response in Canada has included some boycotts of American goods, affecting companies such as Amazon. The government’s tariff adjustment emphasizes ongoing trade cooperation under the USMCA framework.
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