Canada is easing trade tensions with the United States, announcing Friday it will lift most of its retaliatory tariffs on American goods.
Prime Minister Mark Carney stated that the move aims to reestablish free trade across North America under the United States-Mexico-Canada Agreement, commonly referred to as USMCA.
“I’m announcing today that the Canadian government will now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under USMCA,” Carney said.
Canada, however, will continue its 25% tariffs on autos, steel, and aluminum — industries that are crucial to Michigan.
“The situation we’re in now is that Canada and the United States have reestablished free trade for the vast majority of our goods,” Carney said. “Canada will retain our tariffs on steel, aluminum, and autos as we work intensively with the United States to resolve the issues there. Indeed, our focus is squarely on these strategic sectors and the future.”
Glenn Stevens Jr., executive director of MichAuto, said the announcement is a positive step forward.
But he emphasized Michigan’s auto industry has been dealing with the weight of uncertainty.
“Our economies are intertwined, and so it’s been tense, and hopefully this will be a good sign for us to get back to a strong USMCA trade agreement. That’s what we all want,” Stevens said.
Stvens added that uncertainty has slowed investments and created challenges for auto suppliers.
“This is a business that is a long lead time, capital-intensive, very complex supply chain, and it needs stability and certainty to operate, make business decisions, and we haven’t had that,” Stevens said.
So far, consumers haven’t felt the full impact of price increases because the supply chain and automakers have absorbed the added costs. But Stevens warned that it may not last.
“I feel if it goes on, and I think the industry experts would say the same thing, we’re in danger of prices rising,” he said.
With USMCA set for review later this year, Stevens said Michigan’s competitiveness is on the line.
“I think what’s at stake for us in Michigan is maintaining a strong trade partnership with Canada and together being able to compete globally, and that’s really the key for us,” he said.
The tariff changes officially take effect on Sept. 1.
Stevens said that for Michigan families and workers, the hope is that this will eventually bring more stability — and help keep car prices from increasing further.
The average price for a new vehicle in the U.S. is currently around $49,000, Stevens said.a
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