Carney eyes tariff relief despite pledge to push back on Trump

Canadian Prime Minister Mark Carney said his government will examine the possibility of lifting certain retaliatory tariffs on US goods, despite campaigning on a promise to stand firm against President Donald Trump’s aggressive trade measures.

Speaking in West Kelowna, British Columbia, Carney acknowledged the need to carefully balance Canada’s economic interests with a firm stance in the face of US tariffs.

“Retaliatory tariffs should be designed to maximise the impact on the US while minimising the pain for Canadian businesses,” he stated. “When the US changes its tariff rate, we don’t automatically adjust. We look at what we can do for our industry that’s most effective.”

He added, “In some cases, that will be to remove tariffs. We have removed some tariffs over time so that, for example, the auto industry can function more effectively. And we’ll look at opportunities to do so.”

Carney’s remarks highlight the politically sensitive position he occupies — attempting to shield Canada’s economy from harm while maintaining a strong response to Trump’s escalating tariff campaign. The US president has drawn sharp criticism in Canada, not only for sweeping tariffs but also for inflammatory comments suggesting the country should become the 51st US state. Public opinion polling continues to show strong support among Canadians for a tough approach to trade talks.

However, calls for caution have come from some economists, business leaders, and provincial premiers, who warn that further escalation could backfire. In an effort to protect Canadian industries, Carney has already implemented selective exemptions from the country’s counter-tariffs, which target tens of billions of dollars in American goods.

In April, the prime minister extended tariff relief to auto manufacturers that committed to investing and maintaining production within Canada. Then, in June, he announced that Canada would adjust counter-tariffs on steel and aluminium based on negotiations with the US. While Washington has since raised certain tariffs, Canada has so far refrained from issuing a direct response.

Carney narrowly won the April election by campaigning under slogans such as “Canada Strong” and “Elbows Up”—a hockey-inspired phrase meant to symbolise resilience and resistance. His chief rival, Conservative Party leader Pierre Poilievre, mocked the phrase, suggesting that Carney’s leadership amounted to “elbows down and tariffs up.”

Despite Canada’s efforts to respond, the international community has been slow to follow suit. Although the European Union and Mexico have issued warnings about potential retaliatory actions, neither has implemented measures of comparable scale. Canada and China remain the only major economies to have imposed substantial counter-tariffs in response to Trump’s policy.

Last week, the White House cited Canada’s countermeasures as part of its rationale for increasing tariffs on some Canadian products from 25% to 35%. Most Canadian exports, however, remain shielded under the US-Mexico-Canada Agreement (USMCA), which Trump signed during his first presidential term.

US Ambassador to Canada Pete Hoekstra, speaking to the Canadian Broadcasting Corporation, said Trump’s strategy involves “tariffs for every single country in the world,” and indicated that Canada would likely need to remove its retaliatory tariffs as part of any negotiated trade resolution. “They’re an irritant right now,” Hoekstra remarked.

British Columbia Premier David Eby also expressed concern in an interview with Bloomberg last month, stating he did not believe additional counter-tariffs would change Trump’s policy approach. Eby warned such measures could instead harm BC’s economy, as the province struggles to substitute American steel and aluminium with domestic alternatives transported thousands of miles from Canada’s eastern smelters.

Still, the Canadian public appears to favour a firm response. A poll released on August 1 by Angus Reid shows a continued preference among voters for a no-concessions, “hardball” approach in dealing with Trump’s trade agenda.

By Tamilla Hasanova