Canada to remove tariffs on US goods covered by CUSMA by next month

Canada will remove all tariffs on goods from the United States that fall under the Canada-US-Mexico Agreement (CUSMA) by September 1, Prime Minister Mark Carney announced on August 22.

Carney clarified that Canada will maintain its tariffs on steel, aluminum, and autos while working with the US to establish a new trading relationship between the two countries, Caliber.Az reports via CBC. 

"Despite the ongoing trade war, and U.S. tariffs on steel, aluminum, autos, copper, lumber and energy, 85 per cent of trade with the U.S. is still tariff-free — which is a better deal than other countries have," Carney said.

He emphasised the importance of preserving Canada’s trade advantage for workers and their families.

"As we work to address outstanding trade issues with the U.S., it is important we do everything we can to preserve this unique advantage for Canadian workers and their families," Carney said.

The prime minister also confirmed Canada will remove retaliatory 25 per cent tariffs on CUSMA-compliant U.S. goods.

U.S. President Donald Trump praised the move, saying, "We want to be very good to Canada. I like Carney a lot. I think he's a good person and we had a very good talk yesterday," during a press appearance in the Oval Office on August 22.

Earlier this month, Carney had hinted that Canada might drop some counter-tariffs to help Canadian industries cope with the trade war.

The announcement follows Trump’s executive order on July 31, which raised tariffs on some Canadian goods to 35 per cent effective the next day. Canada might have avoided the hike had it reached a new trade deal with the U.S. by the Aug. 1 deadline, which did not happen.

The Trump administration cited fentanyl trafficking and Canada’s prior retaliatory tariffs as reasons for the tariff increase. Since the start of the trade war, Canada has imposed counter-tariffs on U.S. goods three times, including measures on $60 billion worth of U.S. consumer goods, as well as on autos, steel, and aluminum.

The 35 per cent tariff rate, however, applies only to goods not covered under CUSMA.

By Sabina Mammadli