As of September 1, Canada will repeal the 25% tariffs on approximately C$30 billion worth of U.S. imports that comply with the US-Mexico-Canada Agreement (USMCA), thereby restoring free trade on the majority of goods exchanged between the two nations. These tariffs were originally introduced in response to a series of U.S. tariffs affecting Canadian exports, which were set at a steep 35%.
The U.S. administration expressed approval of Canada’s decision, labeling it "long overdue," and indicating optimism for ongoing discussions regarding trade and national security matters. However, Conservative leader Pierre Poilievre criticized Carney's move, suggesting that it reflects a retreat in negotiating strength. Despite this, Carney defended the cabinet's stance by emphasizing that Canada retains a competitive tariff rate of approximately 5.6% on exports compared to the higher averages faced by other countries.
With ongoing tariff pressures primarily on steel, aluminium, and autos, the Canadian economy faces significant challenges, particularly within the manufacturing sector where job losses are becoming increasingly evident. Economists caution that existing U.S. tariffs have been disruptive, directly affecting Canadian suppliers and leading to layoffs, particularly in key industries like automotive manufacturing.
In light of the upcoming review of the USMCA free trade agreement, Carney emphasized the urgency of accelerating negotiations around contentious sectors like steel and automobiles. While Canada aims to re-establish key trading relationships, it remains to be seen how the exchange of tariffs will influence economic stability in both nations moving forward.
The U.S. administration expressed approval of Canada’s decision, labeling it "long overdue," and indicating optimism for ongoing discussions regarding trade and national security matters. However, Conservative leader Pierre Poilievre criticized Carney's move, suggesting that it reflects a retreat in negotiating strength. Despite this, Carney defended the cabinet's stance by emphasizing that Canada retains a competitive tariff rate of approximately 5.6% on exports compared to the higher averages faced by other countries.
With ongoing tariff pressures primarily on steel, aluminium, and autos, the Canadian economy faces significant challenges, particularly within the manufacturing sector where job losses are becoming increasingly evident. Economists caution that existing U.S. tariffs have been disruptive, directly affecting Canadian suppliers and leading to layoffs, particularly in key industries like automotive manufacturing.
In light of the upcoming review of the USMCA free trade agreement, Carney emphasized the urgency of accelerating negotiations around contentious sectors like steel and automobiles. While Canada aims to re-establish key trading relationships, it remains to be seen how the exchange of tariffs will influence economic stability in both nations moving forward.
