Canada to drop some retaliatory tariffs against US, says PM Carney day after Trump call

He said Canada will include the carve-out that the US has on Canadian goods under the 2020 free trade deal that shields the vast majority of goods from the punishing duties.

“Canada currently has the best trade deal with the United States. And while it’s different from what we had before, it’s still better than that of any other country,” Carney said.

Trump Carney phone call

According to PM Carney, Canada is removing retaliatory tariffs on goods that comply with North American Free Trade Agreement (NAFTA) rules, mirroring a key carve-out Trump made for Canadian goods.

The announcement came a day after Carney spoke to Trump, their first communication in months after the two failed to reach an agreement on tariffs.

White House welcomes Canadian announcement

The White House on Friday said it welcomed a report that Canada would remove many retaliatory tariffs on US goods as a goodwill gesture designed to restart stalled trade talks.

“We welcome this move by Canada, which is long overdue. We look forward to continuing our discussions with Canada on the Administration’s trade and national security concerns,” a White House official said.

anada is removing retaliatory tariffs on goods that comply with North American free-trade deal rule. (Photo: Reuters)

United States-Mexico-Canada Agreement

Under the United States-Mexico-Canada Agreement (USMCA) Canadian and Mexican companies can claim preferential treatment. The USMCA is up for review in 2026, and Carney had previously said that the commitment of the US to the core of USMCA means the US average tariff rate on Canadian goods remains one of its lowest, and that over 85% of Canada-US trade continues to be free of tariffs.

Carney had previously rescinded Canada’s plan to tax US technology firms after Trump said he was suspending trade talks with Canada over those plans, which he called “a direct and blatant attack on our country.”

The prime minister disputed any notion that Canada is appeasing Trump, noting that Canada is matching what the US is doing.

“The president and I had a long conversation,” Carney said. “There is a review of the free trade agreement in the spring. We’re starting our preparations.”