The change will go into effect on Sept. 1, Carney added, saying he believes Canada has the best trade deal out of all of the countries working with the U.S.

Canada is dropping retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact.

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.

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

Canada's Prime Minister Mark Carney said on Friday that his country will drop some of its billions of dollars in retaliatory tariffs on US goods, though it will keep levies on autos, steel and aluminium.