Removing numerous tariffs on American merchandise, as planned by Canada.

In a significant development, Prime Minister Mark Carney announced on Thursday that Canada will lift many retaliatory tariffs on U.S. goods. This move comes after months of negotiations between the two nations, aiming to establish a new economic and security relationship.

The decision follows a productive conversation between Carney and U.S. President Donald Trump, marking the first time they have spoken since June. The U.S. will not impose tariffs on Canadian goods compliant with the USMCA, and Canada will match the U.S. by removing all tariffs on U.S. goods specifically covered under this agreement.

However, tariffs on U.S. autos, steel, and aluminum remain in place for now. Despite this, compared to its trading partners, Canadian exports still face a low level of U.S. tariffs overall.

This news has had a positive impact on the Canadian dollar, with it up 0.5% against the U.S. dollar as of 11:05 a.m. The Canadian dollar has extended its gains, reaching C$1.3837 to the U.S. dollar.

It should be noted that Carney won an April election on a promise to stand up to Trump's tariffs. In a bid to appease U.S. companies, Carney scrapped a proposed digital services tax in late June, which was strongly disliked by American corporations.

Despite this progress, the two sides are not yet close to reaching a deal. The Canadian government has not publicly announced specific tariffs on U.S. goods listed under the USMCA that it will abolish at an exact date. No precise information on such tariff removals or their timing is available from the provided sources.

In July, Carney dropped talk of further sanctions if the two sides could not reach a deal by August 1. Since then, Carney has taken a softer tone, signalling a shift in Canada's approach to the ongoing negotiations.

With these developments, Canada and the U.S. have re-established free trade for the vast majority of their goods, marking a significant step towards strengthening their economic relationship.