Prime Minister Carney stresses that over 85% of Canada-U.S. trade remains tariff-free under USMCA—but sector exceptions and review risks add layers of complexity.
Trade Landscape Still Mostly Open
Prime Minister Mark Carney affirmed this week that over 85 per cent of trade between Canada and the United States remains tariff-free, thanks largely to exemptions under the USMCA. He emphasized that this provision preserves duty-free access for most Canadian exports despite recent tariff hikes.
Tariff Hikes Target Specific Goods
Still, the situation isn’t without tension. The U.S. has increased tariffs to 35% on select Canadian goods, particularly those outside USMCA coverage. Major industries—like energy (100% tariff-free) and other key exports (95%)—remain mostly shielded, but smaller firms face challenges.
When and Where It’s Impacting
The changes took effect in early August 2025, after incremental tariff announcements previously rolled out in spring and summer. It plays out at the Canada–U.S. border, where USMCA compliance remains the gatekeeper for tariff exemptions.
Why the Situation Has Nuanced Layers
While the headline figure is reassuring, its simplicity masks complexities:
- USMCA requirements—particularly rules on origin—can be costly or administratively burdensome, especially for small businesses.
- Sector-specific duties on steel, autos, and aluminum still apply unless products fully meet USMCA criteria.
- There’s uncertainty ahead, as the agreement’s next review approaches in 2026, leaving room for future renegotiations.
How Ottawa Is Responding
Carney is navigating a fine line—highlighting the resilient, tariff-free majority of trade, while acknowledging pressures on vulnerable sectors and small businesses. Canada is preparing targeted support, including aid for sectors like softwood lumber, and is exploring strategies to deepen economic ties outside the U.S., notably with Mexico.
Final Take
While 85% tariff-free trade remains the headline message, the true picture is more intricate. Businesses must navigate the specifics of USMCA compliance, and the future of the trade pact itself remains uncertain. As talks near and reviews loom, the path ahead will hinge not just on percentages, but on policy, diplomacy, and adaptability.
© 2025 Mapple News Wire
