Canada and U.S. strike trade deal: tariffs on steel, aluminum and autos slashed
Prime Minister Carney briefed provinces on a framework lowering U.S. tariffs in exchange for restocking American alcohol and supply-management concessions.
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Canada and the U.S. are finalizing a trade agreement expected to substantially lower U.S. tariff rates on key Canadian exports, according to briefings Prime Minister Mark Carney gave to premiers Wednesday evening.
U.S. tariffs on Canadian steel and aluminum are being reduced from 50 per cent to 25 per cent, according to sources with knowledge of the deal. The headline tariff rate on Canadian-built cars and trucks is set to drop from 25 per cent to 15 per cent. Since North American auto markets are tightly integrated, with Canadian-assembled vehicles often containing 50 per cent or more U.S.-manufactured components, applying the tariff only to non-U.S. portions could reduce the effective rate to as low as 7.5 per cent.
In exchange, the framework asks provinces to restore American liquor to government-run store shelves—a politically sensitive ask after all provinces except Saskatchewan and Alberta pulled U.S. booze in response to Trump's tariff threats last year. Nova Scotia Premier Tim Houston said he would be "willing to do for the prime minister at this point," though he quipped: "Whether Nova Scotians or Canadians will actually buy it when it's back on the shelves, that's a whole other discussion."
Saskatchewan Premier Scott Moe praised the framework as a "best-in-class trade agreement" delivering "the strongest of any country in the world" with preferred U.S. market access. Moe noted the trading relationship cannot return to pre-tariff normalcy given Trump's known protectionist stance: "The status quo we had two years ago was not possible."
Houston also confirmed Canada's dairy supply-management system remains intact and defence procurement provisions are favourable to Canada. Provinces were also asked to review procurement policies to ensure nothing specifically excludes the United States.
The deal came together after Trump announced a three-day pause on threatened 50 per cent tariffs set to strike Wednesday. Carney framed the prospective agreement as positioning Canada well relative to other nations also facing U.S. tariff pressure.
What specifically are the remaining unresolved details on derivatives and exemptions for steel and aluminum?
Which provinces besides Alberta and Saskatchewan have signaled willingness to restore U.S. alcohol sales?
We'll update this story as answers emerge.
By the numbers
How much did U.S. tariffs on Canadian steel and aluminum drop?
U.S. tariffs on Canadian steel and aluminum fell from 50 per cent to 25 per cent.
What is the new U.S. tariff rate on Canadian-built cars and trucks?
The headline tariff rate on Canadian-built cars and trucks dropped from 25 per cent to 15 per cent, with the effective rate potentially as low as 7.5 per cent when accounting for U.S.-manufactured components.
What concessions did Canada make in the deal?
Canada agreed to restore American liquor to government-run store shelves in all provinces and to review procurement policies to ensure nothing specifically excludes the United States. Canada's dairy supply-management system remained intact.
