Ottawa, August 25, 2025
News Summary
Canada will lift some retaliatory tariffs on U.S. goods starting September 1, 2025, as part of efforts to restore trade relations. Tariffs on consumer items like orange juice will be removed, but duties on autos, steel, and aluminum will remain. This decision follows a conversation between Canadian Prime Minister Mark Carney and U.S. President Donald Trump, highlighting a diplomatic approach to revitalize trade exchanges while protecting key Canadian industries.
Ottawa
Canada to remove some retaliatory tariffs on U.S. goods, effective Sept. 1, 2025
Canada announced the removal of a subset of retaliatory tariffs on U.S. goods as part of efforts to restore strained trade relations with the United States. The change, scheduled to take effect on September 1, 2025, will lift counter-tariffs on a wide range of consumer and industrial products while retaining duties on autos, steel and aluminum.
What the change covers and immediate effects
The Canadian government will rescind 25% counter-tariffs it had applied to roughly C$30 billion worth of U.S. imports, which previously affected items such as orange juice and washing machines. Tariffs on key sectors including autos, steel and aluminum will remain in place. The move is intended to restore essentially free trade for the majority of goods crossing the Canada–U.S. border while keeping protections on industries deemed strategically important.
Context and diplomatic developments
The announcement followed a high-level phone conversation between Canadian Prime Minister Mark Carney and U.S. President Donald Trump after a missed deadline for a formal trade agreement. Canadian officials have framed the decision as a step toward normalizing trade relations, while U.S. officials responded positively and signaled that the change was overdue.
Political reactions and public opinion
The decision has drawn mixed domestic responses. Polling data indicates that many Canadians continue to support retaliatory tariffs as a negotiating tool. Opposition Conservative leader Pierre Poilievre criticized the rollback, describing it as a concession. The prime minister defended the policy shift by noting that Canada maintains a comparatively favorable tariff position with the United States relative to other trading partners.
Trade measures and comparative tariff levels
Before the recent adjustments, the United States had applied a 35% tariff on certain Canadian goods, provoking retaliatory measures from Canada. Canada’s average tariff on goods entering the U.S. is currently reported at about 5.6%, substantially lower than the global average of roughly 16% faced by other countries. The U.S. also has a separate set of measures, including a 50% tariff on many steel and aluminum imports—subject to some exceptions such as the United Kingdom—along with additional duties on certain auto imports.
Economic and industry impacts
Industry groups and economists have warned that U.S. tariffs on steel and aluminum have had disruptive effects on Canadian manufacturers and suppliers, leading to cutbacks and canceled contracts. The auto manufacturing sector in Ontario has been particularly hard hit, with reported job losses totaling approximately 38,000 positions over a three-month span, largely attributed to trade friction and related supply chain pressures.
Next steps in negotiations and reviews
Officials in both countries expect trade talks to continue, with upcoming negotiations focusing on autos, steel, aluminum and lumber. Canada is also preparing for a scheduled review of the United States–Mexico–Canada Agreement (USMCA) next year, which could influence longer-term tariff and regulatory arrangements. Canadian diplomats stationed in Boston expressed guarded optimism that relations can return to a more normal footing over time, while acknowledging ongoing challenges.
Background
Trade tensions between Canada and the United States escalated throughout 2025, driven by a series of tariff impositions and retaliatory measures. The reciprocal duties disrupted established supply chains and increased costs for exporters and importers on both sides of the border. The recent decision to remove many of Canada’s counter-tariffs represents a tactical shift aimed at de-escalation while preserving tariffs viewed as critical to domestic industry protection.
FAQ
Which tariffs is Canada removing?
Canada is removing a range of 25% retaliatory tariffs previously applied to about C$30 billion in U.S. goods, including consumer items like orange juice and appliances, effective Sept. 1, 2025.
Which tariffs will remain in place?
Tariffs on autos, steel and aluminum will remain active as Canada seeks to protect those sectors while negotiating further with the United States.
Why is Canada lifting some tariffs now?
The government framed the move as an effort to normalize trade relations and re-establish largely tariff-free trade for the majority of goods, following diplomatic engagement with U.S. leadership.
How have the tariffs affected Canadian industries?
Tariffs have disrupted supply chains and prompted layoffs and contract cancellations in multiple sectors. The auto manufacturing sector in Ontario reported around 38,000 job losses over a recent three-month period tied to trade disruptions.
What happens next in negotiations?
Negotiations will continue on autos, steel, aluminum and lumber, and Canada will prepare for a USMCA review next year that could shape future trade terms.
Quick reference table
| Item | Details |
|---|---|
| Effective date | September 1, 2025 |
| Tariffs being removed | Approximately 25% counter-tariffs on C$30 billion of U.S. goods (consumer and industrial items) |
| Tariffs remaining | Autos, steel, aluminum |
| U.S. tariff actions | Previously imposed 35% tariff on some Canadian goods; 50% tariffs on many steel and aluminum imports (with exceptions) |
| Canadian average tariff rate to U.S. | About 5.6% (compared with roughly 16% average for other countries) |
| Reported job impacts | About 38,000 auto-sector job losses in Ontario over three months |
| Next negotiation topics | Autos, steel, aluminum, lumber; USMCA review next year |
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Additional Resources
- AI News: Canada Tariff Retreat
- BBC News: Canada’s Tariff Decision
- Rolling Out: Canada’s Tariff Decision
- New York Times: Canada Tariffs Response
- Reuters: Canada Remove Retaliatory Tariffs
- Wikipedia: Trade between Canada and the United States
- Google Search: Canada tariffs 2025
- Google Scholar: Canada U.S. trade tariffs
- Encyclopedia Britannica: Trade Policy
- Google News: Canada tariffs
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