Canada drops many of its retaliatory tariffs on the U.S.

Canada removed many of its retaliatory tariffs on the U.S. on Friday, marking a significant step forward in the two countries’ relationship.

Canada in March imposed counter-tariffs of 25% on a long list of U.S. products that fall in line with the North American trade deal after the U.S. had announced 25% duties on steel and aluminum. Notably, Canada’s 25% tariffs on U.S. autos, steel and aluminum will remain in place for now, Canadian Prime Minister Mark Carney said in a press conference Friday.

The change will go into effect on Sept. 1, Carney added.

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

Friday’s announcement follows a phone call between Carney and President Donald Trump, the first known call between the two since failed talks before the Aug. 1 tariff deadline. A readout of the Thursday call from Carney’s office called the conversation “productive and wide-ranging,” with both leaders agreeing to reconvene soon.

The move comes as the U.S.-Mexico-Canada Agreement, which Trump negotiated during his first term, is scheduled to undergo a review later this year.

Canada was swift to impose its counter-tariffs on the U.S. on CA$30 billion (US$21.7 billion) worth of U.S. goods under then-Prime Minister Justin Trudeau. In July, Trump announced he would raise tariffs on Canada to 35% and said the rise of fentanyl and Canada’s unwillingness to work with the U.S. affected his decision.

A total of 43 pounds of the drug was seized at the northern border during 2024 with an additional 58 pounds having been confiscated there so far this year, according to U.S. Customs and Border Protection.

At the time, Carney said in a post on X that the country was committed to working alongside the U.S. to come to a deal.