Canada’s Prime Minister Mark Carney announced Friday that the country will lift some of its multi-billion-dollar retaliatory tariffs on US goods, while maintaining duties on autos, steel, and aluminium.

The move follows his first phone call with President Donald Trump after both sides missed a deadline for a new trade deal. Canada had imposed a 25% levy on about C$30bn worth of US products in response to Washington’s tariffs.

Carney said Canada will now align with the US by removing tariffs on goods compliant with the US-Mexico-Canada Agreement (USMCA), restoring free trade for most items. The change takes effect September 1.

The White House welcomed the decision, calling it “long overdue,” while Trump noted he would speak with Carney again soon.

Critics, including Conservative leader Pierre Poilievre, accused Carney of backing down, but the prime minister stressed that Canada’s tariff rate remains far lower than most countries because of the USMCA carve-out.

Tariffs on steel, aluminium, autos, and other key sectors remain in place, with both countries expected to intensify negotiations before next year’s USMCA review.

Economists warn US tariffs on metals could severely harm Canada’s economy, especially in steel, aluminium, and auto manufacturing, which has already reported heavy job losses in Ontario.

This tariffs war started when first US hit Canada with huge tariffs, In Return, Canada Retaliates Against Trump with $155 Billion Tariffs