Canada Drops Retaliatory Tariffs, Aligns with US Exemptions

Canada is eliminating retaliatory tariffs to align with U.S. exemptions for goods under the USMCA agreement. A government official indicated that Canada will adopt the same exemptions as the U.S., ensuring most goods are shielded from duties. The announcement is expected to come from Prime Minister Mark Carney.

In a significant trade development, Canada has decided to abandon its retaliatory tariffs, opting instead to align with the U.S. tariff exemptions on goods covered by the United States-Mexico-Canada Agreement (USMCA). This move comes as part of a broader effort to maintain smooth trade relations between the two neighboring countries.

A government official, speaking on condition of anonymity, revealed on Friday that Canada will incorporate a carve-out for goods that mirrors the existing U.S. exemptions. This adjustment is structured within the framework of the 2020 free trade deal, which primarily shelters the majority of goods from hefty duties.

The official, not authorized to make public statements before the announcement, suggested that Canadian Prime Minister Mark Carney is expected to formally disclose this policy adjustment soon. By aligning itself with the U.S., Canada aims to strengthen economic ties and ensure facilitation of trade under the current agreement.

(With inputs from agencies.)