Canada moved to defuse a tariff fight with the US by dropping most of its 25% counter-tariffs, while keeping duties on US autos, steel, and aluminum in place for now. The change takes effect on September 1.
Prime Minister Mark Carney framed the decision as a strategic pivot toward deal-making: “As we work intensively with the United States, our focus is squarely on the strategic sectors.”
He added a hockey metaphor to underscore the shift: there is “a time in a game where you want the puck, the stickhandle… and put the puck in the net.”
The rollback covers a broad list of US goods that Canada targeted in March after Washington announced 25% duties on steel and aluminum. Canada’s counter-tariffs were first deployed on roughly $30 billion in US imports under then-Prime Minister Justin Trudeau.
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A US official called the change “long overdue” and said, “We look forward to continuing our discussions with Canada on the Administration’s trade and national security concerns.”
Former Conservative leader Erin O’Toole said the government “made the right call… They were a mistake as they hurt [Canadian] businesses more than their limited symbolic value,” urging a focus on shared economic and defense interests.
Friday’s announcement followed a phone call between Carney and President Donald Trump—their first since talks collapsed ahead of the August 1 tariff deadline. Carney’s office described the call as “productive and wide-ranging,” and Carney said Trump assured him that Canada’s tariff rollback would kickstart negotiations.
The timing aligns with the upcoming review of the US–Mexico–Canada Agreement later this year. Keeping auto, steel, and aluminum duties in place signals Ottawa’s intent to protect core supply chains while lowering costs on a wide set of other imports.
Recent US trade steps formed the backdrop. In July, Trump raised tariffs on Canada to 35%, citing fentanyl flows and cooperation concerns. US officials reported 43 pounds of fentanyl seized at the northern border in 2024 and 58 pounds so far this year.
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