Carney Crumbles

Prime Minister Mark Carney announced Friday that Canada will remove all tariffs on U.S. goods covered under the Canada-United States-Mexico Agreement (CUSMA), a move he described as critical to preserving Canada’s unique trade advantage with Washington.

“Throughout our negotiations with the United States on a new trade and security relationship, the objectives of Canada’s new government have been constant: to protect Canadian workers and their families, to reinforce the competitiveness of Canadian businesses, and to build the strongest economy in the G7,” Carney said in a statement.

The Prime Minister underscored that Canada’s decision, effective September 1, 2025, restores free trade on the “vast majority” of bilateral goods. However, tariffs on steel, aluminum, and autos will remain in place while negotiations continue. “Canada will retain our tariffs on steel, aluminum and autos as we work intensively with the U.S. to resolve the issues there. Indeed, our focus now is squarely on these strategic sectors and the future,” he stated.

Carney acknowledged the profound shift in U.S. trade policy, citing the Trump administration’s broad use of International Emergency Economic Powers Act tariffs and its push for reciprocal trade arrangements. “Under the new U.S. approach, countries must now ‘buy access to the world’s largest economy’ through tariffs, investments, unilateral trade liberalization, and policy changes in their home markets,” he said.

He emphasized, however, that Canada retains a privileged position. “Let’s be clear, Canada currently has the best trade deal with the United States. While it is different from what we had before, it is still better than that of any country,” Carney noted. He said the U.S. reaffirmed that CUSMA-compliant Canadian exports are exempt from IEEPA tariffs, leaving more than 85% of bilateral trade tariff-free.

Looking forward, Carney outlined steps to strengthen Canada’s position ahead of next year’s CUSMA review. Ottawa will launch consultations to set priorities, intensify talks with Washington on strategic sectors, and develop a “new comprehensive industrial strategy that protects Canadian jobs, boosts Canadian competitiveness, buys Canadian goods, and diversifies Canadian exports.”

The Prime Minister also tied trade policy to broader domestic initiatives, pledging new defence, housing, and infrastructure projects to bolster national resilience. “We can and must adjust to this new reality,” Carney concluded. “In all these ways, Canada will move from reliance to resilience: building our strength at home, developing new markets abroad, creating new opportunities for Canadian workers and businesses as we build the strongest economy in the G7.”