Canada will soon announce the removal of retaliatory tariffs on numerous US products, according to a Bloomberg report. Prime Minister Mark Carney is expected to announce the decision on Friday after a meeting with his cabinet, serving as an Olive Branch to US President Donald Trump and the White House.
According to Bloomberg, Canada’s government plans to adjust its tariff policy to align more closely with U.S. measures. Back in April, Canada raised reciprocal tariffs on the United States following Trump’s sweeping tariffs announcement. The tariffs included several US goods, including tech and even select US-made vehicles. The report notes that certain products will no longer be subject to a 25% tariff upon importation into Canada, provided they are shipped in accordance with the provisions of the US-Mexico-Canada Agreement. However, US automobiles, steel, and aluminum products are expected to remain a part of ongoing tariffs.
Canada to Lift Select US Tariffs
The expected announcement also comes just a day after PM Carney and Trump spoke by phone, their first publicly acknowledged conversation in weeks. Canada was one of the first countries to announce retaliatory tariffs on the US, and tensions between the US and China have been teetering since. Trump’s call for Canada to become the 51st US state earlier this year didn’t help ease any tensions either.
Canada architected the digital services tax to cost US technology giants approximately $3 billion, with payments going back retroactively to 2022 and also encompassing various major revenue streams. The 3% levy targeted revenue from Canadian users above $20 million annually, affecting numerous significant online marketplaces, social media platforms, and digital advertising services. Additionally, several Canadian citizens began boycotting US goods, financially harming companies like Amazon (AMZN) in the process.
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Unlike in the US, counter-tariffs haven’t caused significant inflation problems in Canada. Statistics Canada said this week the consumer price index rose 1.7% in July from a year earlier, below the Bank of Canada’s 2% inflation target. The US and Canada are preparing for the review of the United States–Mexico–Canada Agreement (USMCA), which is expected to begin in the coming months. Canada’s counter-tariff regime will now emphasize the importance of that agreement.
