OTTAWA — Prime Minister Mark Carney is rolling back billions of dollars in Canadian tariffs on U.S. consumer goods, signaling a dramatic policy shift aimed at de-escalating trade tensions with the Trump administration.
The announcement, expected Friday following a cabinet meeting, will see Canada eliminate 25% tariffs on a wide range of American-made products, including orange juice, wine, clothing, and motorcycles. The rollback will affect roughly $21.7 billion worth of U.S. imports, according to Bloomberg News.
This marks a sharp reversal from Canada’s previous hardline stance under Carney’s leadership, which had emphasized aggressive retaliation against President Donald Trump’s protectionist trade measures. The tariffs, originally imposed in March under the previous Trudeau government, were expanded during Carney’s campaign to include U.S. automobiles in response to American levies on Canadian vehicles.
While the new move is seen as a goodwill gesture, Ottawa is not lifting all restrictions. Tariffs will remain in place on U.S. steel, aluminum, and automobiles — sectors where the Trump administration has maintained heavy duties.
The shift in policy comes just one day after Carney and Trump held their first publicly confirmed phone conversation in weeks. Sources close to the matter say the decision is part of a broader strategy to ease friction ahead of the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA).
Carney’s softer tone contrasts with his campaign rhetoric, during which he vowed to inflict “maximum pain” on the U.S. in response to Trump’s trade actions. That tough talk helped him defeat former Conservative leader Pierre Poilievre in the recent federal election.
Since taking office, however, Carney has begun carving out a more pragmatic economic approach. In April, his finance minister introduced tariff exemptions for specific U.S. goods, especially for companies like General Motors and Stellantis, in exchange for commitments to maintain manufacturing operations in Canada.
Despite threats of retaliation, Canada declined to respond when Trump doubled steel and aluminum tariffs to 50% or when the U.S. raised its so-called “fentanyl tariffs” on Canadian goods from 25% to 35% on August 1.
Economists suggest Carney’s decision reflects a growing recognition of economic realities. According to the Bank of Nova Scotia, the effective U.S. tariff rate on Canadian goods remains under 7% due to USMCA protections. Meanwhile, Canada’s retaliatory tariffs have not significantly impacted inflation, with Statistics Canada reporting a modest 1.7% year-over-year increase in consumer prices in July — below the central bank’s 2% target.
While the tariff rollback has angered some officials in Washington, including Commerce Secretary Howard Lutnick, Canadian officials hope the policy shift will reset relations and pave the way for more stable trade ties with the U.S.
Carney’s approach suggests a new chapter in Canada-U.S. trade relations — less confrontation, more diplomacy.
