Throughout our negotiations with the United States on a new trade and security relationship, the objectives of Canada’s new government have been constant. First, to protect Canadian workers and their families. Second, to reinforce the competitiveness of Canadian businesses. And thirdly, to build the strongest economy in the G7.

Our negotiations with the United States have been taking place as the U.S. has been in the process of fundamentally transforming all – all of its trading relationships. This new U.S. trade policy has several motivations, to raise tariff revenues, to protect strategic industries, to encourage foreign investment in the United States and to change trade and non-trade policy in U.S. partners. And to these ends, the United States has announced a series of trade actions. Those began near the start of this year with the so-called IEEPA tariffs against Canada and Mexico based on U.S. concerns about the border and fentanyl trafficking. Those were quickly followed by reciprocal tariffs on every U.S. trade partner, and very high sectoral tariffs applied globally on strategic industries, including steel, aluminum, autos, and copper. The United States has also imposed substantial trade actions on the Canadian lumber industry. 

Now, in recent weeks, the United States has agreed on a series of trade deals with a variety of countries, and these deals have several aspects in common. First, base line tariffs that cover a broad range of goods and services that are substantially higher than those U.S. tariffs that existed before. In fact, the average U.S. tariff rate on the world has jumped from just over 2% at the end of last year to almost 16%, eight times higher, 16% currently. 

Those trade deals with other countries also have limited or no relief from those sectoral tariffs in those strategic industries such as steel and autos. They include substantial commitments by the U.S. trade partners for investments in the United States and significant unilateral trade liberalization measures by U.S. trade partners. As a result of these developments, the breadth and the depth of the changes in U.S. trade policy have become more fully apparent. Specifically, under the new U.S. approach, countries must now buy access to the world’s largest economy through a combination of tariffs, investments, unilateral trade liberalization, and policy changes in their home markets. 

Now, as in previous trade disputes, Canada has implemented a series of retaliatory tariffs. Their objectives have been to protect Canadian workers and businesses and to incentivize a negotiated settlement with the United States. Few other countries followed suit. In a positive and very important development earlier this month, just a few weeks ago, the United States reaffirmed a core commitment to our free trade agreement, CUSMA. By reinforcing that those Canadian exports to the United States that are compliant with that agreement, that are compliant with CUSMA, will not be subject to U.S. IEEPA tariffs.

Now, there’s a lot of acronyms in that paragraph, so let me try to summarize what that actually means. As a result of that decision by the United States, the actual U.S. tariff rate on Canadian goods is 5.6% . Compare that to the 16% global average. That remains the lowest, the lowest amongst all of the United States trading partners, and more than 85% of Canada-U.S. trade is now tariff free. So, let’s be absolutely clear, Canada currently has the best trade deal with the United States. And while it’s different from what we had before, it is still better than that of any other country. 

So, as we work to address outstanding trade issues with the United States, it’s important, it’s vital we do everything we can to preserve this unique advantage for Canadian workers, Canadian businesses. And doing so will require both building on a soon-to-be revised CUSMA, our free trade agreement with the U.S. and Mexico, as well as developing a new form of trade and security partnership with the United States. 

In this context, and consistent with Canada’s commitment to CUSMA, I’m announcing today that the Canadian government will now match, we will now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under CUSMA.

Let’s be clear, Canada currently has the best trade deal with the United States. While it’s different from what we had before, it is still better than that of any other country. As we (inaudible) to address outstanding trade issues with the United States, it’s important we do everything we can to preserve this unique advantage for Canadian workers and their families. 

Doing so will require both building on a soon-to-be revised CUSMA and developing a new form of trade and security partnership. In this context and consistent with Canada’s commitment to CUSMA, I’m announcing today that the Canadian government will match, we will match the United States by removing all of Canada’s tariffs on U.S. goods covered under CUSMA. This decision will take effect on September 1, 2025.

This decision will take place, or take effect, rather, September 1st of this year. So, in short, the situation we’re in now is that Canada and the United States have reestablished free trade for the vast majority of our goods. 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.

The Canadian government will begin our preparations for the CUSMA review process that is due next year by launching new consultations starting next month, to assess Canadian priorities in the new global trade environment. And in addition, following my conversation with the President of the United States yesterday, Canada and the United States will intensify our discussions to address current trade challenges in those strategic sectors and to seize major immediate opportunities for us both in trade, investment and security. There are many such opportunities. 

The United States is the world’s largest, most dynamic economy, and Canada is one of its most important commercial partners. Canada is the second-largest foreign investor in the United States, and many of our businesses are essential to the complex supply chains that drive American competitiveness. Canada is embarking on a transformation of our military and security capabilities to defend Canadians – investments that will create multiple opportunities for new defence and security partnerships.

As we develop our new trade relationship with the United States, Canada will continue to take all measures necessary to support Canadian workers, our businesses and our consumers. To address challenges in strategic sectors, from agriculture to autos, the Canadian government will soon announce a new comprehensive industrial strategy that protects Canadian jobs, boosts Canadian competitiveness, buys Canadian goods and diversifies US Canadian exports. 

In parallel, we are focused on building our strength here at home, building Canada strong. The Canadian government will soon select the first in a series of new nation-building projects that will connect and transform our economy. We will catalyze investment and create higher-paying careers through our new Defence Industrial Strategy. We’ll transform Canadian strategic sectors that are being severely impacted by U.S. trade. We’ll work to double the pace of home building in Canada, and in the process create a new Canadian housing industry. And we will develop new and stronger partnerships throughout the world. 

For decades, as a result of a series of trade agreements, starting with the Free Trade Agreement of the 1980s, the Canadian and the U.S. economies have become steadily more integrated, continually more deeply connected. As I’ve emphasized in recent months, that steady process of integration is now over, and as a result, some of our historic strengths have become vulnerabilities.

We can and must adapt to this new reality. That means concentrating on trade, investment, and security partnerships that preserve our sovereignty, and it means striking new trade deals that are robust to different economic circumstances, different governments, because of the mutual benefits to both countries. In all these ways, Canada will move from reliance to resilience, building our strength at home, developing new markets abroad, creating new opportunities for Canadian workers and businesses as we build the strongest economy in the G7.