Canada will drop its tariffs on a slew of American products, walking back part of its monthslong retaliation against President Trump’s policies, in a bid to jump start stalled talks with its largest trading partner.
While the move restores free trade on most of the goods traded between the two countries, both Canada and the United States will continue to impose tariffs on each other’s steel, aluminum, copper and vehicles, among other key products.
This move matches American policy, as the United States had already exempted Canadian goods that fall under an existing North American trade agreement that also includes Mexico.
Prime Minister Mark Carney of Canada said on Friday that his handling of the tariff dispute with the United States had earned Canada the lowest average U.S. tariff rate faced by any nation. He said that rate was 5.6 percent, on average, and that his decision was an effort to preserve and build on that.
“We happen to have the best deal with the Americans right now,” he told reporters in Ottawa.
Canada has been the only country in the world other than China to pursue a policy of retaliation against the Trump administration’s broad and volatile tariffs, imposed on friends and foes.
But, as the United States has struck some trade agreements with other jurisdictions, such as the European Union and Japan, Canada has been left out.
While those agreements have not eliminated all tariffs, they are increasingly being seen as the best available option, and the Canadian government has come under increasing pressure from some domestic industries to secure some kind of deal with the United States.
“Nobody has the deal with the United States that they used to have. They have fundamentally changed their trade policy,” Mr. Carney said on Friday.
Despite months of talks, no agreement has materialized. Two deadlines that the Canadian government had said would bring about a deal have come and gone.
The announcement that Canada was eliminating many tariffs on U.S. goods comes a day after Mr. Carney called Mr. Trump to discuss trade.
The walking back of tariffs by Canada will only affect a list of goods that are covered by the free-trade agreement between Canada, the United States and Mexico, known as the U.S.M.C.A.
Canada’s retaliatory tariffs against American steel and aluminum, as well as on vehicles, will remain in place, Mr. Carney said. He said those tariffs are under discussion currently.
It’s a difficult course correction for Mr. Carney, who inherited the retaliatory policy from his predecessor, former prime minister Justin Trudeau, and was elected to office on a pledge to defend Canada’s interest against Mr. Trump’s policies and rhetoric.
Mr. Carney has already quietly walked back some of the retaliatory tariffs over the past few months, arguing that they are not really helping Canada’s quest for a better deal with the United States and that they’re harming the Canadian economy more than the American one.
Since winning a general election in April, Mr. Carney, a seasoned economic policymaker but a political novice, has developed a friendly-but-firm touch with Mr. Trump. The interactions between the two men have been regarded as good examples of how to manage the American leader without fully capitulating to him.
Mr. Carney’s decision to drop some of the tariffs Canada had imposed on American goods is also a move toward placating the U.S. administration ahead of a scheduled comprehensive review of the U.S.M.C.A. scheduled for 2026. While Mr. Trump has not said much about the future shape of this agreement, Mr. Carney said Mr. Trump had offered him assurances that Canada’s new approach would kick-start those broader talks.
Mexico’s leader, president Claudia Sheinbaum, has taken a more low-key approach to dealing with Mr. Trump and has not imposed retaliatory tariffs on American goods.
But both Canada and Mexico have faced broader and more fundamental crises in their relationships with the United States since Mr. Trump took office.
In the case of Canada, Mr. Trump has repeatedly expressed an interest in annexing and integrating the country into the United States, a suggestion that has deeply angered Canadians and galvanized them against their neighbor.
Mexico has been trying to fend off military and law-enforcement encroachments on its sovereignty by the United States by focusing on combating its powerful drug cartels.
While the United States has upended the global trading system and the administration has ushered in a new era of tariffs, Canada and Mexico, America’s two top trading partners, have found themselves in limbo, less able to readily replace the United States as a partner because of the proximity and integration among the three nations.
Mr. Carney, who, from his years in international policymaking enjoys good relationships with European leaders, has aggressively pursued diversifying Canada’s alliances around the world.
He has also initiated efforts to reorient and strengthen Canada’s economy by bolstering trade across provincial lines, eliminating red tape and pursuing major national projects such as roads and bridges and other transport infrastructure, to compensate for the loss of American exports.
Matina Stevis-Gridneff is the Canada bureau chief for The Times, leading coverage of the country.
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