Prime Minister Mark Carney is removing most retaliatory tariffs on goods from the United States starting on Sept. 1.
With the exception of "strategic sectors" such as steel, aluminum and autos, all goods compliant with the Canada, U.S. and Mexico Agreement (CUSMA) will be exempt from tariffs.
This brings Canada's response in line with U.S. tariffs, which exempt these goods.
Goods are CUSMA compliant as long as the product is made in North America, and a certain percentage of the source material is also from within North America. Rules for goods depend on the sector and type. Roughly 85 per cent of Canadian exports to the U.S. are included, as long as the proper paperwork is filed.
The result has been a lower effective tariff rate for Canada than the rest of the world.
The actual U.S. tariff rate on Canadian goods is 5.6 per cent, compared to a 16 per cent global average, Carney said.
"Let's be absolutely clear, Canada currently has the best trade deal with the United States," he said. "While it's different from what we had before, it is still better than that of any other country."
Carney said that dropping these tariffs will help keep this deal in place.
"As we work to address outstanding trade issues with the United States, it's important, it's vital, we do everything we can to preserve this unique advantage for Canadian workers, Canadian businesses," he said.
More to come.
