Canada Bends the Knee to Trump’s Will, Drops Tariffs on U.S. Goods [WATCH]

Canada announced Friday that it will remove a large portion of its retaliatory tariffs on U.S. goods in an effort to restart trade negotiations that have been stalled in recent months.

Canadian Prime Minister Mark Carney said the move is aimed at restoring momentum to bilateral trade discussions under the framework of the U.S.-Mexico-Canada Agreement (USMCA).

Tariffs imposed on U.S. goods compliant with USMCA will be lifted, while restrictions on autos, steel, and aluminum will remain in effect.

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“In this context and consistent with Canada’s commitment to USMCA, I am announcing today that the Canadian government will now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under USMCA,” Carney said during a press conference in Ottawa.

“Canada and the U.S. have now re-established free trade for the vast majority of our goods,” Carney added.

He noted that compared to other trading partners, Canadian exports continue to face relatively low U.S. tariffs.

“Canada currently has the best trade deal with the United States. And while it’s different from what we had before, it’s still better than that of any other country,” he said.

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Carney also said President Donald Trump told him the Canadian action would help relaunch trade talks.

“We welcome this move by Canada, which is long overdue,” a White House official told FOX News.

“We look forward to continuing our discussions with Canada on the Administration’s trade and national security concerns.”

Friday’s announcement follows other recent steps by Canada aimed at smoothing trade relations with the United States.

In late June, the Canadian government withdrew plans for a digital services tax, which had prompted significant pushback from U.S. companies, especially in the technology sector.

The removal of the proposal was seen as an attempt to clear a major obstacle in the trade talks.

Last month, Carney’s government also ended threats to impose new tariffs on U.S. goods if the two countries failed to reach a deal by August 1.

The latest rollback of tariffs underscores Canada’s effort to reduce friction with its largest trading partner and return to negotiations focused on long-term trade stability.

The U.S. and Canada remain each other’s largest or second-largest trading partners depending on the year, with deep ties in energy, agriculture, and manufacturing.

According to the Office of the U.S. Trade Representative, Canada was the top destination for U.S. exports in 2024 and the third-largest source of imported goods.

Canada exported more than three-quarters of its goods to the United States last year, while nearly half of its imports came from the U.S.

U.S. exports to Canada include vehicles, machinery, energy products, and approximately $30 billion in agricultural goods.

Canada’s primary exports to the United States are energy and vehicles, in addition to more than $40 billion in agricultural products.

While most tariffs covered under USMCA are now removed, major sticking points remain over auto, steel, and aluminum products, which continue to be central to ongoing disputes between the two countries.

Both governments have signaled that trade negotiations will resume in the coming weeks, with the goal of resolving outstanding issues and strengthening the long-standing economic relationship.

The tariff removal marks the latest attempt by Canada and the United States to re-establish common ground under the USMCA framework while preserving leverage over key industries where disagreements remain.