Canadian Prime Minister Mark Carney is preparing to eliminate Canada’s heavy tariffs on billions of dollars’ worth of American imports, aiming to ease trade tensions with the Trump administration.
According to Bloomberg News, Carney will make the announcement on Friday after a cabinet meeting, confirming that Canada will lift the 25% tariffs on a wide range of U.S. consumer goods that comply with the North American trade agreement.
This marks a striking reversal for Canada, which had been among the few nations to take an aggressive stand against President Donald Trump’s protectionist trade policies.
With the rollback, American-made items such as orange juice, wine, apparel, and motorcycles will no longer face the steep import duties that have been enforced since March.
Insiders told Bloomberg News that the relief package impacts an estimated $21.7 billion worth of U.S. goods.
However, Carney isn’t abandoning all measures. Canada will continue enforcing the 25% tariffs on American steel, aluminum, and automobiles — sectors where Trump has imposed his own significant penalties.
The unexpected policy shift follows a phone call between Carney and Trump on Thursday, the first publicly confirmed discussion between the two leaders in several weeks.
According to sources, the decision is intended to improve relations with the White House and position Canada favorably ahead of the upcoming review of the U.S.-Mexico-Canada Agreement, expected in the coming months.
The move also represents a sharp pivot from the combative tone Carney embraced during his election campaign, when he pledged to deliver “maximum pain” to the United States through forceful retaliatory actions.
That hardline stance was a key factor in Carney’s victory over Conservative Party leader Pierre Poilievre in the recent election.
Under Justin Trudeau’s administration, Canada first launched the retaliatory tariffs in March, targeting roughly $21.6 billion in American exports. A second wave came in response to Trump’s steel and aluminum duties, applying tariffs on an additional $21.6 billion in U.S. metals and consumer products each year.
Carney escalated the trade fight during his campaign, extending tariffs to American-made automobiles after Trump placed heavy levies on Canadian vehicles.
Since becoming prime minister, however, Carney has taken a different course from his predecessor, showing increased skepticism about the effectiveness of escalating tariff battles.
In April, his finance minister began introducing exemptions, giving Canadian companies the ability to bring in certain U.S. products without paying the tariffs.
Ottawa also offered potential relief to automakers like General Motors and Stellantis, provided they maintained Canadian production and investments.
When Trump doubled steel and aluminum tariffs to 50%, Carney initially threatened to retaliate but ultimately decided against escalating the conflict further.
Similarly, Canada chose not to respond when the White House raised its so-called “fentanyl tariffs” on Canadian goods from 25% to 35% on August 1.
This measured response reflects economic considerations. Analysts at the Bank of Nova Scotia estimate that the effective U.S. tariff rate on Canadian exports remains below 7%, largely due to protections built into the U.S.-Mexico-Canada Agreement.
Despite the back-and-forth, Canada’s retaliatory measures have not fueled the inflation spike some experts predicted.
Statistics Canada reported that consumer prices rose just 1.7% in July compared to the previous year, staying well under the central bank’s 2% target.
The shift has nonetheless frustrated both President Trump and Commerce Secretary Howard Lutnick, who were especially irritated by Canada’s earlier aggressive countermeasures compared to the more restrained responses from other U.S. trading partners.
{Matzav.com}
