On August 22, Prime Minister Mark Carney announced that Canada will remove many of its retaliatory tariffs on U.S. goods compliant with the Canada-United States-Mexico Agreement (CUSMA, also known as USMCA), effective September 1. This affects over 85% of bilateral trade, exempting it from tariffs, and is intended to de-escalate tensions and intensify negotiations for a broader trade and investment agreement.
Tariffs on U.S. steel, aluminum, and automobiles will remain in place for now.
Canada has not finalized a new comprehensive tariff deal with the United States as of August 23, 2025. Carney said the effective U.S. tariff rate on Canadian goods was 5.6 percent, which he described as the best trade deal of any country.
Roman Baber, a Conservative member of the Canadian Parliament, said: “You’re lying again Mark Carney just like you lied during the election campaign. Everything that is tariff free now was already tariff free thanks to former Canadian prime minster Brian Mulroney – not you.
U.S. Commerce Secretary Howard Lutnick has reiterated intentions to fully renegotiate USMCA. The most probable outcome is a revised USMCA by mid-2026, rather than an entirely new bilateral pact.
Broad exemptions for USMCA-compliant goods, potentially lowering or eliminating punitive tariffs on Canadian exports in exchange for U.S. access to Canadian markets (greater dairy quotas, reduced supply management protections).
Agreements on steel, aluminum, autos, and lumber, possibly with quotas or joint production rules to address U.S. concerns over trade deficits.
Enhanced border cooperation on fentanyl, immigration, and drug enforcement; potential clauses on foreign influence and energy/security ties.
Canada will concede on most demands because Canada is weaker than the US and more dependent.
Canada would have to build pipelines and other infrastructure to have other trade market options.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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