Former Prime Minister Justin Trudeau initially placed on retaliatory tariffs in response to US tariffs, however earlier than the US tariffs had been utilized, the Trump administration exempted items lined by the free commerce deal.
Most imports from Canada and Mexico are nonetheless protected by the USMCA, however US Commerce Secretary Howard Lutnick has mentioned, “I feel the president is totally going to renegotiate USMCA.”
Preserving the free commerce pact can be important for Canada and Mexico. Greater than 75% of Canada’s exports go to the US, whereas greater than 80% of Mexico’s exports go there.
Trump has introduced some sector-specific tariffs that do apply for Canada regardless of the USMCA — often called 232 tariffs — that are having an affect on the Canadian economic system. There’s a 50% tariff on metal and aluminium imports, for instance.
“Canada and america have reestablished free commerce for the overwhelming majority of our items. Canada will retain our tariffs on metal, aluminium and autos as we work intensively to resolve the problems there,” Carney mentioned.
Carney beforehand rescinded Canada’s plan to tax US expertise corporations after Trump mentioned he was suspending commerce talks over these plans, which he referred to as “a direct and blatant assault on our nation.”
CANADA IS MATCHING WHAT US IS DOING
The prime minister disputed any notion that Canada is appeasing Trump, noting that Canada is matching what the US is doing.
“The president and I had an extended dialog,” Carney mentioned. “There’s a evaluation of the free commerce settlement within the spring. We’re beginning our preparations.”
The official mentioned the transfer is designed to reset commerce talks between the 2 international locations. The commerce settlement is up for evaluation in 2026.
