Canada has announced that it will remove many of its retaliatory import tariffs on U.S. goods, in a move aimed at improving trade ties and advancing talks on a new trade and security relationship with Washington.
Prime Minister Mark Carney made the announcement on Friday during a press conference in Ottawa, saying Canadian tariffs on U.S. autos, steel, and aluminum would remain for now, but most others would be lifted.
Carney explained that the decision comes after the United States assured that it would not impose tariffs on Canadian exports that comply with the U.S.-Mexico-Canada Agreement (USMCA). “Canada and the U.S. have now re-established free trade for the vast majority of our goods,” he said, noting that Canadian exports still face a lower overall tariff burden compared with other trading partners.
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The announcement boosted market confidence, with the Canadian dollar rising 0.5% to C$1.3837 per U.S. dollar, or 72.27 U.S. cents, by midday.
Carney also confirmed he spoke with U.S. President Donald Trump on Thursday, who indicated that lifting tariffs would help restart stalled talks on a broader economic and security deal. Discussions between the two countries have been ongoing for months but remain far from a final agreement.
The White House welcomed Canada’s move, calling it “long overdue” and expressing hope for continued negotiations on trade and national security concerns.
Carney, who came to power in April after promising to resist Trump’s tariffs, has recently adopted a more moderate tone. Over the summer, his government scrapped a proposed digital services tax that U.S. companies opposed and backed away from threats of additional sanctions. Using an ice hockey reference, Carney said Canada needed to play a “more moderate game” instead of relying on aggressive retaliation.
The decision, however, may pose political risks for Carney at home. His Liberal government holds only a minority in parliament and depends on opposition support to survive key votes. Opposition leader Pierre Poilievre and the Conservatives have already accused Carney of being too soft on Washington.
Carney’s predecessor, Justin Trudeau, had imposed 25% tariffs on C$30 billion worth of U.S. imports in March 2025 as part of a larger C$155 billion retaliation plan. Most of those tariffs have since been scaled back or delayed.
