Prime Minister Mark Carney announced Friday that Canada will remove all tariffs on U.S. goods covered under the Canada-United States-Mexico Agreement, effective Sept. 1. That move was met by warnings from the country’s largest private-sector union it weakens the country’s bargaining position.
The decision comes as the United States has imposed sweeping trade actions against Canada, including tariffs based on border security concerns and high sectoral tariffs on steel, aluminum, automotive and lumber industries, according to Carney’s statement.
Trade war escalates with new U.S. approach
The U.S. has fundamentally transformed its trading relationships, with average tariff rates jumping from just over 2 per cent at the end of last year to almost 16 per cent currently, Carney said. Under the new American approach, countries must “buy access to the world’s largest economy” through tariffs, investments and policy changes.
Canada currently faces a 5.6 per cent average U.S. tariff rate, the lowest among all American trading partners, with more than 85 per cent of Canada-U.S. trade remaining tariff-free, according to the prime minister.
Union warns move undermines worker protection
Unifor National President Lana Payne criticized the tariff removal as weakening Canada’s position in trade negotiations.
“Walking back counter-tariffs is not an olive branch — it’s an open invitation for more U.S. aggression,” said Payne. “Canada should not give up counter-tariffs unless the U.S. drops all of its unfair tariffs.”
The union, which represents 320,000 workers including those in auto plants, steel mills and aluminum smelters directly affected by U.S. trade actions, called the move “a betrayal of the workers who are and will be paying the price.”
Strategic sectors remain protected
Canada will maintain tariffs on steel, aluminum and automotive products while working with the U.S. to resolve issues in those sectors, Carney said. The government plans to announce a comprehensive industrial strategy to protect Canadian jobs and boost competitiveness in strategic sectors affected by U.S. trade actions.
Future trade relationship under review
Following a conversation with President Donald Trump on Thursday, Canada and the U.S. will intensify discussions to address current trade challenges and explore opportunities for trade, investment and security partnerships, according to Carney.
The Canadian government will begin preparing for the CUSMA review process scheduled for next year by launching consultations next month to assess Canadian priorities in the new global trade environment.
Carney acknowledged that decades of economic integration between Canada and the U.S. has ended, with some historic strengths becoming vulnerabilities under the new trade reality.
