Prime Minister Mark Carney is removing retaliatory tariffs on most goods from the United States, effective Sept. 1.
All goods compliant with the Canada, U.S. and Mexico Agreement (CUSMA) will be exempt from tariffs, according to the announcement on Friday, Aug. 22. Levies will remain in place for "strategic sectors" such as steel, aluminum and autos that still have U.S. tariffs imposed on them.
Carney said he and U.S. President Donald Trump had a "long conversation" on Thursday, and that the prime minister was told dropping the tariffs would kickstart trade negotiations between the countries.
Trump said later on Friday morning he thought it was "nice" of Carney to drop the tariffs.
"We are working on something, we want to be very good to Canada," Trump told reporters in the Oval Office in Washington D.C. "I like Carney a lot. I think he's a good person, and we had a very good talk yesterday."
This move from Carney brings Canada's response in line with U.S. tariffs, which exempt CUSMA-compliant goods from tariffs.
Prime Minister Mark Carney announced that most of CanadaSA国际影视传媒檚 retaliatory tariffs on U.S. goods will be lifted starting Sept. 1. Strategic sectors like steel, aluminum, and autos will keep protections, but all CUSMA-compliant goods will now be exemptSA国际影视传媒攁ligning CanadaSA国际影视传媒檚 stance with that of the U.S. Carney says the move preserves CanadaSA国际影视传媒檚 trade edge, with Canadian exports facing a much lower tariff rate than the global average. He emphasized the importance of protecting this advantage amid ongoing trade talks.
Goods are CUSMA compliant as long as the product is made in North America, and a certain percentage of the source material is also from within North America. Rules for goods also depend on the sector and type of product. Roughly 85 per cent of Canadian exports to the U.S. are included, as long as the proper paperwork is filed.
The result has been a lower effective tariff rate for Canada than the rest of the world.
The actual effective U.S. tariff rate on Canadian goods is 5.6 per cent, compared to a 16 per cent global average, Carney said.
"Let's be absolutely clear, Canada currently has the best trade deal with the United States," he said. "While it's different from what we had before, it is still better than that of any other country."
Carney said that dropping these tariffs will help keep this deal in place.
"As we work to address outstanding trade issues with the United States, it's important, it's vital, we do everything we can to preserve this unique advantage for Canadian workers, Canadian businesses," he said.
No changes for B.C.'s response yet
B.C. Jobs and Economic Growth Minister Ravi Kahlon, who also heads the provincial government's tariff response cabinet committee, said that at this point, B.C. will not be removing any of its response measures, which include U.S. alcohol products being barred from sale in B.C. Liquor stores.
"We are not removing those at this time, and even if we did remove them, the way that British Columbians have been responding, I don't think anyone would be buying that alcohol anyways," he said, adding that he was "surprised" by Carney's decision.
Kahlon said the provincial government needs to see more progress before backing down, but the plan is to give the feds "space" to negotiate.
Premier David Eby is scheduled to meet with Carney later Friday to discuss the changes to the retaliatory tariffs.
