Canada will remove its retaliatory tariffs against the US in a major victory for Trump

The socialist Canadian Prime Minister, Mark Carney, announced on Friday that Canada will suspend most of its retaliatory tariffs against the United States, after the administration of former President Donald Trump reaffirmed its commitment to the United States-Mexico-Canada Agreement (USMCA).

This decision marks a significant shift in the Canadian stance after several months of trade tensions, and has been taken as a gesture of goodwill toward Washington.

Despite the removal of most tariffs, Canada will maintain a 25% duty on steel, aluminum, and vehicles from the United States, since these products are not directly covered by the USMCA.

In March, Canada had imposed these tariffs as retaliation after the Trump administration applied a similar 25% tariff on Canadian steel and aluminum.

According to some media outlets, this decision by the Canadian government is interpreted as a kind of "olive branch" toward Trump, seeking to ease bilateral tensions and pave the way for future negotiations.

Carney emphasized that Canada's retaliatory tariff policy has always aimed to protect Canadian workers and businesses, as well as to encourage a negotiated solution with the United States. He also noted that other countries have adopted similar strategies in previous disputes.

In his remarks, Carney highlighted that the United States recently reaffirmed its commitment to the USMCA, guaranteeing that Canadian exports meeting the terms of the agreement will not be subject to new tariffs.

This decision, according to the Prime Minister, has reduced the effective tariff rate on Canadian products to 5.6%, a figure significantly lower than the global average of 16%, and the lowest among United States trading partners. In addition, more than 85% of trade between both countries remains tariff-free under the current terms.

It is worth recalling that at the end of July, Trump signed an order to impose a 35% tariff on Canadian products. However, the White House later clarified that most of these products are exempt under the USMCA, which in practice leaves the average tariff at 5.6%.

A White House official commented that Canada's decision to reduce its tariffs was "highly anticipated," and expressed optimism about future bilateral talks regarding trade and national security concerns.

Another official, quoted anonymously, indicated that the U.S. Secretary of Commerce, Howard Lutnick, had recently warned Canada about the consequences of maintaining retaliatory tariffs, urging their removal to facilitate dialogue.

The Canadian decision to step back came after a phone conversation between Carney and Trump, which the Prime Minister described as "productive and far-reaching."

The USMCA could be formally reviewed later this year, which could open new opportunities to adjust or expand the terms of the agreement. Carney also mentioned that Canada will seek to move toward a new form of partnership in trade and security with the United States.