Most of Canada’s retaliatory tariffs against the United States came down on Monday, in keeping with Prime Minister Mark Carney’s announcement last month.
Carney announced that many of Canada’s tariffs on its biggest trading partner, on goods that comply with the Canada-U.S.-Mexico (CUSMA) trade agreement, will come down starting Sept. 1.
He said this was after he and U.S. President Donald Trump agreed to “intensify” stalled trade talks.
In February, Trump signed an executive order to levy broad-based, sweeping tariffs on Canada. The Canadian government responded immediately with then-Prime Minister Justin Trudeau announcing counter-tariffs against Washington.
“Few other countries followed suit” in imposing tariffs on the U.S., Carney said.
Carney said Canada’s move was to “match’ U.S. tariffs, which remain in place and went up from 25 per cent to 35 per cent last month. The U.S. granted exemptions to Canada under CUSMA-complaint goods, but has placed tariffs on certain key Canadian sectors.
Canada’s counter-tariffs on U.S. auto, steel and aluminum remain.
Carney said Canada and the United States have “re-established free trade for the vast majority of our goods.”
While Canada’s average tariff rate with the U.S. is higher than it was this time last year, “it is still better than that of any country,” he added.
“As we work to address outstanding trade issues with the United States, it’s important — it’s vital — we do everything we can to preserve this unique advantage for Canadian workers, Canadian businesses,” Carney told reporters in Ottawa last month.
Trump called the move “nice” while speaking to reporters in the Oval Office soon after Carney’s announcement and said he would be speaking again with Carney “soon.”
“We’re working on something,” he said.
“We want to be very good to Canada. I like Carney a lot. I think he’s a good, good person and we had a very good talk yesterday.”
Will groceries get cheaper?
With the removal of these tariffs, Canadians could see prices on some groceries come down relatively quickly, said University of Guelph food economist Mike Von Massow.
One of the first products that Canadians could see get cheaper is Florida orange juice.
Get daily National news
Get the day’s top news, political, economic, and current affairs headlines, delivered to your inbox once a day.
“Those prices should come down relatively quickly because orange juice is a perishable product,” von Massow said.
Other products with longer shelf life, such as American pickles or sugar, will take a lot longer to get cheaper, he said.
“We put tariffs on U.S. sugar, so we should see the prices of those sugar products, like candy, that contain sugar that went up in price come down. Those will probably come down a little less quickly than orange juice, because it’s not a perishable product,” von Massow said.
Canada’s major grocers are expecting food prices to start decreasing in the coming days but warn that it may take longer than some want.
“In the days ahead, the price of goods in all grocery stores impacted by tariffs will start to come down. Prices will come down over time, as we sell-through inventory that was purchased based on tariffed pricing,” Loblaw said in a statement on its website.
The response from Canada’s business and labour community has been lukewarm to Carney removing the tariffs on the U.S.
Unifor, Canda’s largest public sector union, called Carney’s move a “betrayal of the workers” of Canada.
“Walking back counter-tariffs is not an olive branch—it’s an open invitation for more U.S. aggression. It sends the wrong signal at the worst possible moment,” Unifor president Lana Payne said in a statement.
United Steelworkers, a union representing Canada’s metal workers, also criticized the move.
“Prime Minister Carney must meet the moment we are in,” said USW national director Marty Warren.
“The federal government must remain steadfast in working to not only safeguard and protect Canadian workers but aggressively build Canadian economic resiliency. Now is the time to be bold and develop a coherent industrial strategy for the Canadian economy and its workers,” Warren said in a statement.
Some business groups, however, are welcoming the move.
“By removing these tariffs, the Government of Canada is creating space for the U.S. and Canada to return to the table and focus on solutions that eliminate barriers to trade for our two countries,” the Canadian American Business Council’s statement read.
Business groups say this could lead to lower prices for some goods in the days and weeks ahead.
“It’s certainly welcome news. For us, the retailers and the retail industry, and by extension, the Canadian consumer who’s been seeing the cost of this tariff war over the last few months,” said Matt Poirier, vice-president of the Retail Council of Canada.
The Business Council of Canada said that while this was “welcome news”, Canada’s government must look to the future as CUSMA will be up for review in 2026.
“While there is more work to be done to resolve tariffs in strategic sectors, Canada’s priority must be the successful review and renewal of the U.S.-Mexico-Canada Agreement,” the group’s president and CEO Goldy Hyder said.
The Canadian Chamber of Commerce said a new deal must centre predictability in the Canada-U.S. trade relationship.
“Our focus must remain on securing a durable, predictable arrangement with the United States — one that gives businesses and consumers confidence not just for weeks, but for years,” the Chamber said in a statement.