“Throughout our negotiations with the United States about our new trade and security relationship, the objectives of the Government of Canada were constant:
- Protect Canadian workers and their families
- Strengthen the competitiveness of Canadian companies
- Build the strongest economy in the G7
These negotiations take place while the United States transforms its commercial relations from top to bottom. This new American trade policy has several objectives: to increase revenue collected through customs duties, to protect strategic industries, encourage foreign investment in the United States and modify the trade and non-commercial policies of the United States partners.
To this end, the United States has announced a series of commercial measures, starting with the taxation of customs duties in Canada and Mexico under the International Emergency Economic Powers Act (Ieepa) to follow up on their concerns about border management and fentanyl traffic. Subsequently, the United States has imposed customs duties in a reciprocal manner on all its business partners as well as very important sectoral customs rights all over the world in strategic industries such as steel, aluminum, automobile and copper. The United States has also applied substantial trade measures to the Canada’s timber industry.
In recent weeks, the United States has concluded a series of trade agreements with various countries, and these agreements have certain aspects in common:
- Basic customs duties which target a wide variety of goods and are considerably higher than in the past. The average customs duties imposed by the United States on an international scale has increased from just over 2 % at the end of last year to almost 16 % at present;
- Limited or non -existent reduction in sectoral customs duties in strategic industries such as steel and automobile;
- Substantial commitments on the part of the United States trading partners to invest in the United States;
- Substantial commitments on the part of the United States trade partners to implement important unilateral commercial liberalization measures.
Consequently, the scope of the changes made by the United States to its commercial policies has become more manifest. More specifically, as part of the new American approach, countries must now “buy their access to the largest global economy” through customs duties, investments, unilateral commercial liberalization and changes to their policies in their own markets.
As in other past sales disputes, Canada has imposed a series of customs duties in a reciprocal way. Their goal is to protect workers and businesses in Canada and promote a negotiated agreement with the United States. Other countries have done the same.
On a positive note, earlier this month, the United States reaffirmed its commitment to our free trade agreement, the Canada-United States-Mexico Agreement (ACEUM), indicating that Canadian exports to the United States which comply with ACEUM would not be the subject of customs duties in the United States under the IEEPA. Consequently, the current average of the United States on Canadian goods rate is 5.6 % and remains the lowest among all their business partners, and more than 85 % of Canadian-American trade is now exempt from customs duties.
Let’s be clear: Canada is currently having the best trade agreement with the United States. It is different from the past agreements, but it is already better than those that the United States has concluded with any other country. We will refrain from settling the commercial issues pending to the United States, and during this time it is important to do everything we can to preserve the sole advantage that we have for Canadian workers and their families. We will therefore have to rely on the ACEUM, which will be reviewed shortly, and to establish a new form of commerce and security partnership.
In this context, and in accordance with Canada’s commitment to respect ACEUM, I announce today that the Government of Canada will take measures equivalent to those of the United States and eliminate all Canadian customs duties on American goods which are targeted by ACEUM. This decision will come into force on 1is September 2025. In short, Canada and the United States restore free trade for the vast majority of their goods.
Canada will maintain its customs duties on steel, aluminum and automobile while it is working hard with the United States to resolve the stakes in these sectors.
At the moment, we are indeed granted absolute priority to these strategic sectors and in the future.
The Government of Canada will start its preparations for the ACEUM examination process scheduled for next year by launching new consultations from next month to assess Canadian priorities in the new global commercial context.
In addition, following my conversation with the President of the United States yesterday, Canada and the United States will intensify their discussions in order to address current trade challenges in strategic sectors and to seize the important opportunities that are currently presented to establish partnerships in terms of trade, investment and security.
There are many opportunities. The United States is the most important and dynamic economy in the world, and Canada is one of its most important business partners. Canada is the second foreign investor in importance in the United States, and many of our businesses are essential to complex supply chains that stimulate American competitiveness. Canada undertakes a transformation of its military and security capacities to defend Canadians and Canadians – investments that will create many opportunities to establish new defense and security partnerships.
While establishing a new commercial relationship with the United States, Canada will continue to take all the measures necessary to support Canadian workers, businesses and consumers.
To meet the challenges in strategic sectors ranging from agriculture to the automobile, the Canadian government will soon announce a new global industrial strategy that will protect Canadian jobs, will stimulate Canada’s competitiveness, promote the purchase of Canadian goods and will diversify Canadian exports.
At the same time, we have the aim of strengthening our country, building a strong Canada. The Government of Canada will soon select the first in a new series of major projects of national interest which will make it possible to unify and transform our economy. We will stimulate investment and create well -paid careers using our new industrial defense strategy. We will transform the Canadian strategic sectors hardened by the United States trade measures. We will double residential construction in Canada and create a new housing industry. We will establish new, stronger commercial partnerships in the rest of the world.
For decades, following a series of trade agreements, Canadian and American savings have become increasingly integrated and more and more closely linked. As I have pointed out in recent months, this is now over. Consequently, some of our historical forces have become vulnerabilities.
We can adapt to this new reality, and we have to do it. This means that we will have to focus on establishing partnerships in terms of trade, investment and security that will preserve our sovereignty. We will also have to conclude new trade agreements which will resist the various economic circumstances and the various governments due to the mutual benefits they will generate for the two countries.
In all these ways, Canada will go from dependence to resilience: it will become stronger, will develop new markets abroad, will create new possibilities for Canada workers and businesses while we build the strongest economy in the G7. »»
