Canada is dropping many of its retaliatory tariffs to match U.S. tariff exemptions for goods covered under the Canada-United States-Mexico Agreement (CUSMA), Canada’s prime minister Mark Carney announced Friday.
The prime minister said Canada will maintain its tariffs on steel, aluminum and autos as the government works with the U.S. to craft a new trading relationship between the two countries.
This decision will take effect on September 1, 2025.
“In this context and consistent with Canada’s commitment to CUSMA, I am announcing today that the Canadian government will now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under CUSMA,” said the prime minister in a statement on Friday.
Earlier this month, the United States reaffirmed a core commitment to Canada’s free trade agreement, Canada-United States-Mexico Agreement (CUSMA), by reinforcing that those Canadian exports to the United States that are compliant with CUSMA will not be subject to U.S. IEEPA tariffs.
Carney said the actual U.S. average tariff rate on Canadian goods is 5.6% and remains the lowest among all its trading partners. He noted that more than 85% of Canada-U.S. trade continues to be free of tariffs.
The Canadian government will begin its preparations for the CUSMA review process due next year by launching new consultations starting next month to assess Canadian priorities in the new global trade environment.
In addition, following conversations with the president of the United States Donald Trump last week, Canada and the United States will intensify their discussions to address current trade challenges in strategic sectors and to seize “major immediate opportunities” for trade, investment and security partnerships.
Meanwhile, Mark Carney and the prime minister of Poland, Donald Tusk, announced they will strengthen the Canada-Poland strategic partnership.
The enhanced partnership will deepen ties across trade, defence, and energy security, investing in key sectors, such as clean energy, including nuclear, critical minerals, defence, aviation, cybersecurity, and advanced technologies.
