Ottawa — Aug 22, 2025: Canada will remove a large share of its retaliatory tariffs on U.S. imports in a bid to de-escalate trade frictions, but will retain 25% duties on U.S. steel, aluminum and automobiles, according to multiple briefings ahead of a formal announcement. The shift comes as Ottawa positions for the USMCA’s six-year joint review beginning July 2026.
What’s changing
- Many consumer and intermediate goods targeted since March will see tariffs lifted; affected trade is estimated around ~$21 billion in U.S. exports, roughly half of the prior target list, according to market briefings and live coverage.
- Ottawa’s approach will more closely align with U.S. exemptions, easing pressure on supply chains and signaling goodwill before 2026 talks.
What’s not changing
- Core industrial sectors remain protected: Canada will keep 25% tariffs on U.S. steel and aluminum products and on automobiles—areas Ottawa views as strategically sensitive amid ongoing U.S. tariff actions.
Why now
- The recalibration follows renewed leader-level engagement between Ottawa and Washington and aims to create space for negotiations before the USMCA review in July 2026, which could reshape rules of origin, market access and other provisions if talks turn contentious.
Market and business impact
- Importers and retailers of covered goods should see cost relief once tariff removals take effect, while metal-using manufacturers and auto supply chains will still face elevated input costs tied to steel, aluminum and vehicle tariffs. Recent U.S. moves to broaden steel and aluminum tariff coverage underscore why Ottawa is keeping its defensive measures in place.
What to watch next
- Official notice and implementation details: timing, HS-code lists, and any application or certification requirements for exemptions.
- USMCA review choreography: whether tariff détente widens into sector-specific deals or becomes leverage in 2026 negotiations.