Business owners, trade officials, and industry leaders across North America are reacting with a blend of optimism and caution to Canadian Prime Minister Mark Carney’s recent announcement that Canada will drop most of its retaliatory tariffs on U.S. goods by September 1, 2025. The move, which comes amid ongoing trade tensions and high-profile negotiations between Ottawa and Washington, is being hailed as a potential turning point in the fraught economic relationship between the two neighbors.
According to CBC News, Carney’s decision will see Canada remove all tariffs on U.S. goods covered by the Canada-U.S.-Mexico Agreement (CUSMA)—also known as the USMCA—while maintaining tariffs on steel, aluminum, and automobiles. As of late August, 85 percent of trade between Canada and the United States remains tariff-free, but the remaining tariffs have caused significant disruption for businesses on both sides of the border.
For many Canadian business owners, the news brings a sense of guarded relief. Jason Tasse, president of Lee Valley Tools in Ottawa, described the move as "an act of good faith, as challenging as it could be for our economy," adding, "[it] could be instrumental in striking a better deal going forward for both countries." Yet, Tasse was quick to point out the practical headaches caused by such policy shifts. "From a business planning point of view, it is a constant challenge when you don't know what your margin impacts will be based on these policy changes," he said, noting that his company’s 600-page catalog has already been sent out, complicating adjustments to pricing and profit margins.
Paul Meek, owner of Kichesippi Beer Co., which sources aluminum cans from the United States, also welcomed the development. "As a small business person, I need to try and look at things positively," Meek told CBC News. "So I'm definitely trying to look at this as what I hope will be more good news for the economy and more good news for small business." He characterized the dropping of tariffs as an "olive branch" that could pave the way for more stable trade relations.
Not everyone, however, is convinced that the move will bring immediate relief. Jack Shinder, CEO of Ambico, an Ottawa-based company specializing in blast-proof and bullet-resistant doors, said his business has been "deeply impacted by the tariff regimen" because both his customers and suppliers are primarily based in the U.S. "We can't just change those supply chains overnight," Shinder explained, emphasizing that his company’s cross-border relationships have been built over four decades. He also questioned the effectiveness of Canada’s counter tariffs, stating, "We thought the imposition of retaliatory tariffs would lighten the tariff load that we Canadian manufacturers would experience. I think that has had very little if no effect."
South of the border, the decision has been met with cautious optimism by industry leaders, particularly in Kentucky’s bourbon sector. Canada’s retaliatory tariffs had targeted American distilled spirits, including Kentucky bourbon, which is a major export product. In 2024 alone, Kentucky exported $751 million in spirits products. The Kentucky Distillers’ Association President Eric Gregory applauded Carney’s decision, saying in a statement, "We applaud Prime Minister Mark Carney’s decision to restore reciprocal zero-to-zero tariffs for Kentucky Bourbon and many other remaining goods covered under the USMCA. We hope this action will jump start negotiations on a permanent trade deal, benefiting both American businesses and Canadian consumers seeking to enjoy America’s only native spirit."
However, some industry representatives remain skeptical about the immediate impact of the tariff reversal. Chris Swonger, President and CEO of the Distilled Spirits Council of the United States, told The Courier Journal, "This is a very positive sign, but until all the provinces put American spirits back on their shelves, it won’t have much of an impact." Swonger pointed out that the removal of American spirits from Canadian retail shelves not only harms U.S. distillers but also reduces revenue for Canadian provinces and places unnecessary burdens on local consumers and hospitality businesses. Gregory echoed this sentiment, expressing hope for the day when "Canadians can toast the return of Kentucky bourbon to their provinces and territories," while thanking Alberta and Saskatchewan for already restoring American alcoholic beverages to their shelves.
The decision to lift tariffs is also being seen as a strategic move by Canadian officials to improve the country’s negotiating position ahead of a scheduled review of the USMCA. Canadian Finance Minister Dominic LeBlanc, in comments reported by Newsmax, described the tariff removal as "crucial groundwork for potential renegotiation of the U.S.-Mexico-Canada Agreement" and noted that discussions with U.S. Commerce Secretary Howard Lutnick and direct communication between Carney and President Donald Trump have improved prospects for renewed talks. LeBlanc also highlighted that the relationship between the U.S. and Canada extends far beyond simple trade, stating, "We build things together and sell them around the world."
Yet, significant hurdles remain. As reported by Newsmax, Washington has not indicated any willingness to roll back the steep tariffs on steel and aluminum, which President Trump doubled to 50 percent in June. LeBlanc acknowledged that Canada is particularly vulnerable because these tariffs hit sectors where the two economies are most integrated, such as autos and manufacturing. He also noted that Canada’s retaliatory tariffs were a major point of contention for the Trump administration, and dropping them could help Ottawa "sit constructively at the negotiating table." According to LeBlanc, ongoing talks are exploring investment opportunities in defense and security that might relieve pressure on the steel, aluminum, and automobile sectors, with the goal of reaching some form of agreement in the coming weeks or months.
Provincial leaders have also weighed in. Ontario Premier Doug Ford, in a social media post cited by CBC News, called for any new agreement with the United States to provide relief to sectors like steel, auto, and forestry that have been hit hard by tariffs. "If the federal government can't achieve that, they need to hit back hard against U.S. tariffs and provide additional supports for the workers and businesses in these sectors," Ford wrote, underscoring the political stakes at play.
For now, the lifting of most retaliatory tariffs marks a significant, if tentative, step toward easing trade tensions and reopening the door for serious negotiations. Business owners, industry leaders, and policymakers alike are watching closely, hoping that this olive branch will blossom into a more stable and mutually beneficial trade relationship between Canada and the United States.
