Canada Removes Tariffs on US Goods Compliant with USMCA, Matching US Exemptions

Strategic Insights -

In a significant move, Prime Minister Mark Carney announced that Canada will remove all tariffs on US goods that are compliant with the existing North American free trade agreement, the United States-Mexico-Canada Agreement (USMCA). This decision comes after a call with President Donald Trump, who called the move "nice." Carney emphasized that Canada has "the best deal of any country with the United States right now," and that the Trump administration is compelling countries "to buy access to the world's largest economy." He noted that the average tariff rate on goods entering the United States from around the world has increased to 16 percent, up from two percent before Trump took office.

Key Takeaways:

  • Canada will remove all tariffs on US goods that are compliant with the USMCA, matching exemptions affirmed by the US earlier this month.
  • The US tariff rate on Canadian goods was 5.6 percent, with 85 percent of Canada's trade being tariff-free.
  • Carney said the decision reflects the evolving stages of trade negotiations with the US, and that Canada wants to "intensify" discussions on a broader trading relationship.
  • Canada will retain tariffs on strategic sectors like steel, aluminum, and autos as it works with the US to resolve issues in these areas.
  • The USMCA revision talks, set for next year, will be a key focus for the Canadian government.
  • Trump administration's global sector-specific tariffs, targeting auto, steel, and aluminum imports, have done significant damage in Canada.

Statistics:

  • Average tariff rate on goods entering the US from around the world: 16 percent (up from 2 percent before Trump took office)
  • US tariff rate on Canadian goods: 5.6 percent
  • Percentage of Canadian trade that is tariff-free: 85 percent
  • Number of sectors where Canada will retain tariffs: 3 (steel, aluminum, and autos)

Sources:

  • [doc.afp.com](http://doc.afp.com)
  • [BLOX Digital Content Exchange](http://BLOX Digital Content Exchange)