Canada to drop counter-tariffs on US goods covered by free trade agreement

Ottawa, Aug 23 Canadian Prime Minister Mark Carney said that the country will lift its counter-tariffs on US goods specifically covered under the Canada-US-Mexico Agreement (CUSMA) starting September 1.

Carney made the announcement on the prime minister's website, one day after he spoke by phone with US President Donald Trump on Thursday.

"Canada will retain our tariffs on steel, aluminum and autos as we work intensively with the US to resolve the issues there," according to the statement.

Canada and the United States have been in a trade war since the United States announced sweeping tariffs on Canadian goods in February, Xinhua news agency reported.

Carney said the move to drop some counter-tariffs is meant to match US levies by implementing a carve-out for goods covered by CUSMA.

The two leaders discussed on Thursday current trade challenges and opportunities, sharing priorities in a new economic and security relationship between the two countries.

Canada had placed a 25 per cent levy on about C$30billion (£16bn; $21.7bn) worth of US goods on an array of products, including orange juice and washing machines.

The tax hike was in retaliation to US tariffs on Canada, which as of August are valued at 35 per cent on all goods not compliant with the countries' existing free trade deal.

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