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Canada Removes Tariffs on U.S. Goods

September 2, 2025

Note: This bulletin was updated on September 2, 2025, to reflect the Government of Canada’s broader elimination of tariffs than what was originally announced on August 22, 2025.

Effective September 1, 2025, Canada fully eliminated its 25% retaliatory tariffs on U.S. goods that had been in place since March 4, 2025 (covering approximately C$30-billion in Phase 1 goods), as well as on miscellaneous consumer products that had been enacted as part of the aluminum and steel countermeasures since March 13, 2025 (representing an additional C$14-billion in goods).

This elimination is broader than originally announced by Prime Minister Carney, who had suggested that only goods compliant with the Canada-United States-Mexico Agreement (CUSMA) would be relieved. It also goes further than the corresponding U.S. exemption on Canadian goods, which remains limited to CUSMA-origin items.

However, Canadian tariffs on a variety of U.S. steel, aluminum and automotive imports will remain in effect. A full list of the products still subject to retaliatory tariffs can be found here.

Background

On March 4, 2025, Canada imposed 25% retaliatory tariffs on an initial select list of U.S. imports worth C$29.8-billion (referred to as the Phase 1 list of goods). These retaliatory tariffs were imposed after the U.S. imposed a 25% tariff on all products of Canada except energy products, which were subject to a 10% tariff.

Shortly thereafter, on March 7, 2025, U.S. President Donald Trump issued an executive order exempting any CUSMA-compliant good from the U.S tariffs. This resulted in more than 85% of Canadian goods entering the U.S. tariff-free. While Canada did not offer a similar exemption, it paused the enactment of Phase 2 retaliatory tariffs on a much longer list of goods (worth C$125-billion).

For a full history of the Canadian–U.S. trade measures, see our U.S.–Canada Tariffs: Timeline of Key Dates and Documents.

Canadian Tariffs on U.S. Steel, Aluminum and Autos Remain in Force

Since March 2025, the U.S. has imposed tariffs on Canadian steel, aluminum and automobiles, with no exceptions for goods certified as CUSMA-compliant.

As a result, the 25% Canadian retaliatory tariffs on U.S. auto imports, aluminum and steel products will remain in force.

Looking Ahead

This reduction of tariffs signals an effort to stabilize bilateral trade relations between Canada and the U.S. as they prepare for the upcoming CUSMA review negotiations scheduled for 2026. At this time, businesses on both sides of the border should continue to monitor ongoing trade developments in the steel, aluminum and auto sectors and confirm which goods are still subject to retaliatory tariffs.

For more information, please contact the authors or any other member of our International Trade group. 

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