Prime Minister Mark Carney said Friday that Canada will lift many retaliatory tariffs on U.S. goods and step up talks with Washington to forge a new trade and security partnership.
Canadian tariffs on U.S. autos, steel and aluminum will remain for now, he told a press conference in Ottawa.
Carney noted that the United States had recently made clear that it would not impose tariffs on Canadian goods that were compliant with the three-nation U.S.-Mexico-Canada free trade agreement, something he called a positive development.
"In this context and consistent with Canada's commitment to USMCA, I am announcing today that the Canadian government will now match the United States by removing all of Canada's tariffs on U.S. goods specifically covered under USMCA," he said.
"Canada and the U.S. have now re-established free trade for the vast majority of our goods," he added, reiterating that compared with its trading partners, Canadian exports were still subject overall to a low level of U.S. tariffs.
Canadian tariffs on U.S. autos, steel and aluminum will remain for now, said the source, who requested anonymity given the sensitivity of the situation.
The news helped the Canadian dollar extend its gains and by 11:05 a.m. it was up 0.5% at C$1.3837 to the U.S. dollar, or 72.27 U.S. cents. Canada has been holding talks with the United States on a new economic and security relationship for months but the two sides are not close to a deal.
Carney won an April election on the back of a promise to stand up to U.S. President Donald Trump's tariffs, but since then has gradually taken a softer tone.
In late June, he scrapped a proposed digital services tax that U.S. companies strongly disliked and in July dropped talk of further sanctions if the two sides could not reach a deal by August 1. Carney spoke to Trump on Thursday for the first time since June and held what his office called a productive conversation.
