Canada is dropping many of its retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact, Prime Minister Mark Carney announced Friday. Carney said Canada will include the carve-out that the U.

A Canadian government official says that Canada is dropping retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact

The move represents an about-face for Canada, which had been one of the few countries to punch back against President Trump’s protectionist agenda.

Under that scenario, headline inflation would stay below 2% until late 2026. The Bank of Canada sets interest rates to achieve and maintain 2% inflation. “The removal of retaliatory tariffs on many products should help quell any lingering concerns at the Bank of Canada about tariff-induced inflation,” Mendes said.