Canada will eliminate 25% tariffs on U.S. consumer goods worth roughly $21.7 billion, including orange juice, wine, clothing, and motorcycles. Prime Minister Carney’s move follows a direct phone call with President Trump and marks a sharp break from his campaign promise to retaliate against U.S. trade measures. - Prime Minister Mark Carney is abandoning one of his central campaign promises — to hit the United States with “maximum pain” through sweeping tariffs — and is instead extending what amounts to a trade olive branch to President Donald Trump. The decision to remove 25% tariffs on a broad range of U.S. consumer goods, valued at $21.7 billion, represents a remarkable about-face for a Canadian government that had previously positioned itself as one of Trump’s fiercest international trade adversaries. - Carney’s pivot is particularly striking given the fiery rhetoric that propelled him into office. During his campaign, he blasted Trump’s tariffs and vowed to retaliate aggressively. That posture may have served him politically against former Conservative leader Pierre Poilievre, but as prime minister, Carney appears more pragmatic. His finance ministry has already carved out exemptions for automakers and other industries since April, suggesting a growing awareness that trade wars can backfire economically. - The decision is also shaped by economic realities. Despite Canada’s earlier tariff blitz, economists note that the effective U.S. tariff rate on Canadian goods remains below 7% thanks to USMCA exemptions. Meanwhile, Canada’s retaliatory tariffs did not produce the inflation surge some feared, with consumer prices rising only 1.7% in July. Still, Carney faced the prospect of prolonged strain with Washington at a time when the U.S. economy is expanding under Trump’s leadership, and Canadian businesses were lobbying hard for relief -- For President Trump, this is another reminder that his “America First” approach is producing results. Canada, once defiant, is now backing down — a stark contrast to the confrontational posture of Justin Trudeau’s government and even Carney’s own campaign pledges. The message is clear: protectionist threats from Washington carry weight, and Canada’s leaders are recognizing that cooperation is more beneficial than confrontation.
