Canada will remove many reciprocal import tariffs on the U.S. and intensify trade talks to create a new deal, according to Prime Minister Mark Carney.
From 1 September, Carney said Canada will remove tariffs on goods that are covered by the Canada-U.S.-Mexico Agreement (CUSMA) but will maintain its tariffs on steel, aluminium and autos.
This decision comes just a day after the two leaders spoke over the phone.
While there is still an ongoing trade war between the two countries and U.S. tariffs on steel, aluminium, autos, copper, lumber and energy, 85% of trade with the U.S. is still tariff-free, which Carney said is a better deal than most countries have.
"As we work to address outstanding trade issues with the U.S., it is important we do everything we can to preserve this unique advantage for Canadian workers and their families," Carney said.
Carney also noted that the U.S. had made it clear that it would not impose tariffs on Canadian goods that were compliant with CUSMA.
"In this context and consistent with Canada's commitment to USMCA, 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 USMCA," he said.
"Canada and the U.S. have now re-established free trade for the vast majority of our goods.
Carney first hinted he would drop the counter tariffs earlier this month if it would help Canadian industries fare better in the trade war with the U.S.
This comes after Trump signed an executive order on 31 July raising tariffs on some Canadian goods to 35%. The White House said the change was in response to fentanyl trafficking and Canada’s decision to hit back with counter tariffs.
The White House called the move “long overdue” and said Carney paved the way for “continuing our discussions with Canada on the administration’s trade and national security concerns”.
