A new chapter in the trade dispute with the United States opened this week when Prime Minister Mark Carney announced that retaliatory tariffs on some U.S. exports included in the existing Canada-U.S. trade deal would be rescinded.
“I think this is a positive step because we had the U.S. ambassador last week saying this was a major impediment to making any progress … that Canada had retaliatory tariffs on some goods that were actually covered under the existing trade agreement,” financial analyst Michael Campbell told Global News.
He broke down some items that will be cheaper for Canadians now that the tariffs have been removed.
“It’s orange juice, peanut butter, craft beer, ketchup, coffee pods, refrigerators, washing machines, microwaves, lawn mowers … denim jeans, running shoes, bicycles, lipstick, other cosmetics, toothpaste, paper towels, bed sheets; all of those will at least ease some price pressures on individuals and the businesses in Canada selling them,” Campbell said.
Carney said Friday that Canada will lift many of its retaliatory tariffs on U.S. goods that fall under free trade rules, after agreeing with President Donald Trump to “intensify” stalled trade talks.
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Canadian counter-tariffs on American autos, steel and aluminum will remain for now, Carney said, describing the move as a bid to “match” Trump’s tariffs on Canada. The change will take effect starting next week, the prime minister said.
“Canadian Federation of Independent Business was the latest to come in and say, ‘Look what’s happening to small and medium-sized businesses,” Campbell said.
“Fifty-eight per cent of small businesses said they were hurt by our retaliatory tariffs. Sixty-seven per cent said they paid the full tariffs on U.S. imports themselves.
“Here’s the thing that’s really discouraging: 38 per cent said they would close if the tariff dispute lasts for a year. Nineteen per cent (said they’re) not even going to make it six months. So obviously, this is a serious deal, and I think they’ll greet this with good news.”
Carney’s announcement on Friday came a day after he held what he called a “productive” call with Trump, their first known discussion since Trump raised tariffs on Canada to 35 per cent on Aug. 1.
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Those tariffs only apply to Canadian goods that fall outside the Canada-United States-Mexico Agreement on free trade (CUSMA), continuing an exemption Trump first announced in the spring.
Canada had kept its counter-tariffs on nearly $30 billion of U.S. goods that fall under the free trade pact, including orange juice and microwaves, despite Trump’s CUSMA carve-out.
“A couple of things we do know,” Campbell said. “No matter which side of the border you’re on, tariffs are a bad deal for consumers and businesses because they pay the tariff, no matter which country.”
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