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Tipsheet

Canada Drops Retaliatory Tariffs Against the US

AP Photo/Mark Schiefelbein

Canadian Prime Minister Mark Carney announced that Canada will be dropping its retaliatory tariffs against the United States and eliminating tariffs on U.S. goods covered under existing trade agreements.

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On Friday, Carney finally began walking back some of the damaging retaliatory tariffs imposed on the United States. In a press conference, Carney announced that Canada will lift its counter-tariffs on a range of U.S. goods starting September 1 — a long-overdue admission that punishing American businesses hasn’t worked out so well for the Canadian economy. Canada’s 25 percent tariffs on U.S. steel, aluminum, and auto exports will remain in place for now, as Carney tries to save face with domestic political allies. But even this partial rollback is significant. It follows the U.S. move to raise tariffs on Canada to 35 percent — a bold, unapologetic response from President Trump after months of Canada refusing to play ball on fair trade and security cooperation. 

"As we work intensively with the United States, our focus is squarely on the strategic sectors,” Carney said. 

According to the Carney government, the call was “productive and wide-ranging,” with both leaders agreeing to reconvene. But let’s be honest: Carney didn’t come to the table out of goodwill. He came because Trump put real pressure on him — economic, political, and diplomatic. In March, Canada slapped a 25 percent counter-tariff on over CA$30 billion (US$21.7 billion) worth of U.S. products. This was in response to the U.S. applying national security tariffs on Canadian steel and aluminum. Under the failed leadership of former Canadian Prime Minister Justin Trudeau, Canada retaliated by imposing tariffs on key U.S. exports despite being heavily reliant on American trade. 

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Now Carney, Trudeau’s supposed successor-in-competence, has started to accept reality. “As we work intensively with the United States, our focus is squarely on the strategic sectors,” Carney said at his presser — a vague way of saying Canada knows it can’t afford to pick a trade war with the United States.

While Carney tries to paint this as a bold act of leadership, the truth is that this is a long-overdue concession to economic and geopolitical reality. Canada depends on the United States far more than the U.S. depends on Canada. But with American strength and leverage resurgent under the Trump administration and a pro-growth, America-first agenda back in the White House, Carney had little choice but to abandon the failed policies of his liberal predecessors. 

Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.

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