Canadian government has dismissed allegations that it has quietly withdrawn retaliatory tariffs against the United States, following reports suggesting that recent exemptions have rendered them largely ineffective.
Finance Minister François-Philippe Champagne addressed these claims on Sunday, labeling them as “falsehoods.”
He emphasized that Canada had implemented its most extensive countermeasure in history, imposing $60 billion in tariffs on end-use goods, with 70% of these tariffs still in effect.
The controversy arises after a meeting in Rome between Canadian Prime Minister Mark Carney and U.S. Vice President JD Vance.
The two leaders discussed immediate trade pressures and the necessity of establishing a new economic and security relationship.
While Carney’s office described the meeting as focused on shared interests, including fair trade policies, Vance referred to it as a “casual meeting.”
In response to U.S. tariffs on Canadian goods, Carney’s administration had imposed sweeping counter tariffs.
However, the Canadian government later granted a temporary six-month reprieve on certain tariffs, particularly affecting sectors like automotive, health, food processing, and national security.
This move aimed to mitigate domestic economic disruption and allow industries time to adjust.
Despite these exemptions, a recent Oxford Economics report suggested that the effective tariff rate had fallen to near zero, prompting criticism from Opposition Leader Pierre Poilievre, who accused Carney of secretly backing down on trade.
Champagne’s office clarified that approximately Can$43 billion (US$31 billion) worth of U.S. goods remain subject to tariffs, and that the temporary exemptions were strategically targeted to give Canadian businesses time to diversify away from U.S. supply chains.
With around 75% of Canada’s exports directed to the United States, the ongoing trade tensions continue to have significant implications for the Canadian economy.
Some U.S. tariffs, including a general 25% duty and sector-specific levies on steel, aluminum, and autos, remain suspended pending ongoing negotiations.
