Canada lowers many of its retaliatory tariffs to the United States

Canadian Prime Minister Mark Carney said Friday that his country would impose billions of dollars in retaliatory tariffs on U.S. goods, although that would impose taxes on cars, steel and aluminum.

It was the day after he and President Donald Trump first posted by phone as the two countries missed the self-imposed deadline for reaching a trade agreement.

Canada imposes a 25% levy on approximately CAD$30 billion (£16 billion; $21.7 billion) of U.S. goods, a range of products including orange juice and washing machines.

The tax increase is in retaliation against Canada’s U.S. tariffs, with all commodities not complying with the country’s existing free trade agreements at 35% as of August.

Carney said Canada will now match the U.S. by complying with goods tariffs that comply with the U.S.-Mexico-Canada Free Trade Agreement (USMCA). He said this would “re-establish free trade in the vast majority of goods moving between the two countries”.

Carney said the decision will take effect on September 1.

In a statement to the BBC’s U.S. news partner CBS, the White House said it welcomed Canada’s move, adding that it was “long overdue” and that the United States looked forward to continuing discussions on trade and national security with its northern neighbors.

As part of Trump’s global trade strategy, Canada is one of many countries that the U.S. levied, but it is one of only two countries–together with China, their retaliatory collection of U.S. goods.

Polls show that most Canadians support retaliatory tariffs on the United States.

Carney, who was elected in an April general election, adopted an active “elbow” approach to negotiate with Trump and mentioned a popular hockey term.

When asked whether Canada is weakening its approach, Carney believes that tariff transactions with the United States are better than many other countries due to free trade goods.

This puts the actual tariff rate on Canadian goods at about 5.6%, which is well below the average of other countries by about 16%.

“When we work hard to solve the outstanding trade issues with the United States, it is important that we do everything we can to retain this unique advantage for Canadian workers and businesses,” he said.

Carney said Canada’s focus will now accelerate negotiations on automobiles, steel, aluminum and wood, and other important sectors ahead of scheduled review of the USMCA free trade agreement next year.

In addition to the volume of steel and aluminum imports from the UK and all steel and aluminum imports from copper, the United States imposes a 50% tariff on all steel and aluminum imports. It also applies 25% to aluminum imports.

As far as Canada is concerned, Canada imposes a 25% tariff on U.S. steel, aluminum and automobiles. Carney said these will remain in place.

Since returning to the White House in January, Trump has launched a global trade war that imposes tariffs on goods around the world or raises tariffs and threatens to get higher when negotiating a trade deal he believes is good for the United States.