The change will go into effect on Sept. 1, Carney added, saying he believes Canada has the best trade deal out of all of the countries working with the U.S.

Canada is dropping retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact.

A Canadian government official says that Canada is dropping retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact

The move represents an about-face for Canada, which had been one of the few countries to punch back against President Trump’s protectionist agenda.

Under that scenario, headline inflation would stay below 2% until late 2026. The Bank of Canada sets interest rates to achieve and maintain 2% inflation. “The removal of retaliatory tariffs on many products should help quell any lingering concerns at the Bank of Canada about tariff-induced inflation,” Mendes said.