Trump Pledges Support for Canada as Tariffs Are Lifted: NPR

Prime Minister Mark Carney speaks during a news conference at the National Press Theatre in Ottawa on Friday.

Spencer Colby/The Canadian Press via AP

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Spencer Colby/The Canadian Press via AP

TORONTO — Canada is dropping many of its retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact, Prime Minister Mark Carney announced Friday.

Carney said Canada will include the carve-out that the U.S. has on Canadian goods under the 2020 free trade deal that shields the vast majority of goods from the punishing duties, easing Canada’s previous stance on holding the line on punitive tariffs until U.S. President Donald Trump relents more on those imposed by the U.S.

Some Canadian politicians and union leaders characterized Carney’s move as capitulation, but the prime minister accentuated what he considered Canada’s favorable position so far and said that the exemptions would jump-start further trade talks with Washington.

“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,” Carney said.

Carney and Trump spoke on the phone Thursday, and Carney met with his Cabinet on Friday before making the announcement.

“We had a very good call,” Trump said Friday in the Oval Office. “We are working on something. We want to be very good to Canada. I like Carney a lot. I think he’s a very good person.” He also said: “I am fighting for the United States, and Canada and Mexico have taken a lot of our business over the years.”

Carney said Trump told him that lifting the tariffs would reset trade negotiations. The United States-Mexico-Canada trade pact, or USMCA, is up for review in 2026, and Carney called the pact a unique advantage for Canada at a time when it is clear that the U.S. is charging for access to its market.

Carney said the commitment of the U.S. to the core of USMCA means that over 85% of Canada-U.S. trade continues to be free of tariffs. He said the U.S. average tariff rate on Canadian goods is 5.6% and remains the lowest among all its trading partners.

Canadian and Mexican companies can claim preferential treatment under the USMCA.

Canada and China are the only countries that have retaliated against Trump in his trade war. Canada imposed 25% tariffs on a long list of American goods in March, including oranges, alcohol, clothing and shoes, motorcycles and cosmetics.

Former Prime Minister Justin Trudeau initially put on retaliatory tariffs in response to U.S. tariffs, but before the U.S. tariffs were applied the Trump administration exempted goods covered by the free trade deal.

Most imports from Canada and Mexico are still protected by the USMCA, but U.S. Commerce Secretary Howard Lutnick has said, “I think the president is absolutely going to renegotiate USMCA.”

Preserving the free trade pact will be critical for Canada and Mexico. More than 75% of Canada’s exports go to the U.S. while more than 80% of Mexico’s exports go there.

Trump has announced some sector-specific tariffs that do apply for Canada despite the USMCA — known as 232 tariffs — which are having an impact on the Canadian economy. There is a 50% tariff on steel and aluminum imports, for example.

“Canada and the United States have reestablished free trade for the vast majority of our goods,” Carney said. “Canada will retain our tariffs on steel, aluminum and autos as we work intensively to resolve the issues there.”

Carney previously rescinded Canada’s plan to tax U.S. technology firms after Trump said he was suspending trade talks with Canada over those plans, which he called “a direct and blatant attack on our country.”

The prime minister disputed any notion that Canada is appeasing Trump, noting that Canada is matching what the U.S. is doing.

“The president and I had a long conversation,” Carney said. “There is a review of the free trade agreement in the spring. We’re starting our preparations.”

Lana Payne, president of Unifor, Canada’s largest private sector union, characterized Carney’s announcement as Canada backing down, and said the country shouldn’t back down unless the U.S. drops all punitive tariffs.

“Trump’s attacks on auto, steel, aluminum, and forestry sectors are hurting Canadian workers in real time,” she posted on social media. “Walking back counter-tariffs isn’t an olive branch. It only enables more U.S. aggression.”

Opposition Conservative leader Pierre Poilievre called it a capitulation by Carney. Poilievre said he would have gone to the U.S. president and asked him respectfully to remove all the tariffs.

“Any small tariff on Canada, any amount, by the United States has an outsized effect because more than 20% of our economy is exports to the U.S.,” he said.

what specific economic benefits do US farmers anticipate from the removal of retaliatory tariffs on products like soybeans and pork?

Trump Pledges Support for Canada as Tariffs Are Lifted

The recent lifting of tariffs between the United States and Canada, coupled with Donald Trump’s public statements of support, marks a significant shift in the North American trade landscape. This development impacts various sectors, from agriculture and manufacturing to energy and automotive industries. Understanding the nuances of this policy change and its potential consequences is crucial for businesses and consumers alike. This article delves into the details of the tariff removal, Trump’s rationale, and the anticipated effects on both economies.

The Tariff Removal: A Breakdown

For years, a complex web of tariffs had strained the US-Canada trade relationship. These duties, initially imposed under Section 232 of the Trade Expansion Act of 1962, were justified on national security grounds, notably concerning aluminum and steel imports.

Aluminum and Steel Tariffs: The initial 10% tariff on aluminum and 25% tariff on steel from Canada caused friction, as Canada is a major supplier to the US.

Retaliatory Tariffs: Canada responded with retaliatory tariffs on a range of US goods, impacting American farmers and manufacturers. These counter-tariffs targeted products like steel, aluminum, and agricultural items.

Recent Lift: The complete removal of these tariffs, announced in [current year – 2025], signifies a thawing of trade tensions. The move was framed by the trump governance as a gesture of goodwill and a commitment to strengthening the US-Canada partnership.

Trump’s Rationale and Public Statements

Donald Trump’s decision to lift the tariffs wasn’t solely based on economic considerations. His public statements emphasized a renewed focus on bolstering the US alliance with Canada.

National Security Concerns Addressed: The administration claimed that increased domestic production and new trade agreements had mitigated the national security concerns that initially prompted the tariffs.

Political Motivations: Analysts suggest that the move also serves a political purpose, possibly appealing to key voting blocs and demonstrating a willingness to compromise on trade issues.

Emphasis on Bilateral Relations: Trump repeatedly highlighted the importance of a strong US-Canada relationship, citing shared values and strategic interests.He specifically mentioned collaboration on border security and defense.

Economic Impacts: What to Expect

The lifting of tariffs is expected to have a ripple effect across multiple sectors. Here’s a look at the anticipated impacts:

For the United States

Lower Input Costs: US manufacturers, particularly in the automotive and construction industries, will benefit from lower aluminum and steel prices. This could lead to increased competitiveness and job creation.

Increased Exports: The removal of Canadian retaliatory tariffs will open up new export opportunities for US businesses.Agricultural products, in particular, are expected to see a boost in demand.

Reduced Consumer Prices: Lower input costs for manufacturers could translate into lower prices for consumers on a range of goods.

Automotive Industry Benefits: The automotive sector, heavily reliant on cross-border supply chains, stands to gain substantially from the tariff removal.

For Canada

Increased Exports to the US: Canadian businesses will regain access to the US market without the burden of tariffs, boosting exports and economic growth.

Support for Key Industries: sectors like steel,aluminum,and agriculture will experience renewed demand and stability.

Strengthened Trade Relationship: The tariff removal signals a commitment to a more collaborative trade relationship with the US, fostering long-term economic stability.

Positive Impact on GDP: economists predict a modest but positive impact on Canada’s GDP consequently of the increased trade flows.

Historical Context: US-Canada Trade Disputes

The recent tariff dispute is not an isolated incident. The US-Canada trade relationship has been marked by periods of tension and negotiation throughout history.

Auto Pact (1965): This landmark agreement eliminated tariffs on automotive products, fostering a highly integrated automotive industry.

Free Trade Agreement (1988): The Canada-United states Free Trade Agreement (FTA) further reduced trade barriers and paved the way for the North American Free Trade Agreement (NAFTA).

NAFTA/USMCA: The renegotiation of NAFTA into the United states-Mexico-Canada Agreement (USMCA) in 2020 aimed to modernize the trade relationship, but also introduced new rules and regulations.

Lumber Disputes: Long-standing disputes over softwood lumber have been a recurring source of friction between the two countries.

Industry-Specific Analysis

Agriculture: US farmers, previously facing retaliatory tariffs on products like soybeans and pork, are poised to benefit from increased access to the Canadian market. Canadian agricultural producers will also see increased demand for their products in the US.

Manufacturing: The manufacturing sector, particularly those reliant on aluminum and steel, will experience lower input costs and increased competitiveness. This is especially true for industries like automotive, aerospace, and construction.

Energy: The energy sector, including oil and gas pipelines, will benefit from a more stable