Listeners, it’s August 29th, 2025, and here’s the latest on tariffs and U.S.-Canada trade for our “Canada Tariff News and Tracker” podcast.

In breaking news, Canada has announced it will remove its 25 percent retaliatory tariffs on United States goods that qualify as originating under the Canada-United States-Mexico Agreement, or CUSMA, effective September 1st. This decision, revealed by Canadian Prime Minister Mark Carney, means that if U.S. exports to Canada meet the CUSMA rules of origin—with proper certification—they’ll be exempt from these steep tariffs. However, it’s important to note that Canadian tariffs on U.S. steel, aluminum, and auto imports remain in place for now. These tariffs were originally imposed as retaliation after the Trump administration slapped a 25 percent tariff on most Canadian products this past March, except for energy, which remained at a 10 percent tariff.

Responding to the tit-for-tat measures, President Donald Trump signed an executive order on March 7th exempting CUSMA-compliant goods from U.S. tariffs, which has allowed more than 85 percent of Canadian exports to the United States to enter tariff-free. Canada’s current move is seen as an effort to align its own policy with the CUSMA exemption and stabilize trade relations ahead of the 2026 review of the agreement. Importers now need to be vigilant in meeting CUSMA documentation requirements—compliance is essential to benefit from these exemptions.

Turning to economic impacts, Statistics Canada reported today that the Canadian economy shrank 1.6 percent annualized in the second quarter, mainly due to a sharp drop in exports and business investment thanks to the surge in U.S. tariffs. The hardest hit exports were passenger cars and light trucks, which plummeted nearly 25 percent, with machinery and travel services also showing declines. Business investment in equipment saw its worst level since 2016 outside of the pandemic period. Imports from the U.S. fell as Canadian counter-tariffs discouraged U.S. companies, and travel spending dipped as Canadians stayed home during the ongoing trade dispute.

Canada’s goods and services trade deficit has ballooned from just $800 million in the first quarter to $19.5 billion now, according to Statistics Canada. The once-healthy surplus with the U.S. shrank dramatically, while the effects rippled across multiple industries. Economist Moshe Lander of Concordia University noted that as exports drop, so does demand for labor, putting pressure on Canadian jobs.

Looking ahead, Canada’s massive farm sector is watching nervously. While the Trump administration hasn’t yet directly targeted Canadian agricultural products with tariffs, the threat remains. Experts warn that if crop tariffs are imposed, revenues for Canadian farmers could be slashed and rural communities severely impacted, creating a domino effect across the supply chain.

Listeners, that’s your update on what’s shaping U.S.-Canada tariffs today. Be sure to subscribe to stay informed on these evolving trade stories. Thanks for tuning in. This has been a quiet please production, for more check out quiet please dot ai.

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