OTTAWA — Canada plans to drop several retaliatory tariffs on U.S. goods, a move that could result in lower prices for consumers. However, union leaders have expressed concerns that this decision may weaken Canada's negotiating power in ongoing trade talks.

Prime Minister Mark Carney announced on August 22, 2025, that Canada will remove certain retaliatory tariffs to align with U.S. tariff exemptions under the Canada-United States-Mexico Agreement (CUSMA). This change is set to take effect on September 1, 2025.

According to Colin Mang, an assistant professor of economics at McMaster University, the primary beneficiaries of this announcement will be consumers and retailers importing American goods, such as Loblaws, Metro, and Sobeys. Mang stated that removing tariffs could lead to price reductions at grocery stores for items previously subject to tariffs, such as orange juice. He noted that prices may also decrease for other American products, including spices, nuts, and baked goods.

While some families may not notice significant price drops on these items individually, Mang emphasized that the cumulative effect over time should be meaningful. The extent to which consumers experience this relief will depend heavily on the actions of retailers. During the period of imposed tariffs, many retailers raised prices by 10 to 15 percent or more. Mang expressed hope that retailers would pass some or all of the savings back to consumers, but he acknowledged that once prices rise, it is often challenging to see them decrease again.

In his announcement, Carney also indicated that Canada has re-established free trade for the majority of goods, although tariffs on steel, aluminum, and autos will remain while the government continues to work with the U.S. to address outstanding issues. The Canadian Federation of Independent Business (CFIB) has celebrated the decision to drop some of the retaliatory tariffs, viewing it as a relief for small Canadian businesses as trade discussions progress.

Corinne Pohlmann, the CFIB's executive vice-president for advocacy, mentioned that recent research indicates aluminum and steel tariffs have significantly impacted small business members, with over half reporting that counter tariffs were affecting their operations. Pohlmann asserted that the removal of these CUSMA-compliant tariffs should yield positive results for many small companies engaged in importing goods. However, she acknowledged that businesses in the steel, aluminum, and auto sectors would continue to face challenges and would need time to recover.

Conversely, labor unions are expressing skepticism about the government's decision. Unifor, a prominent union, released a statement asserting that eliminating retaliatory tariffs undermines Canadian workers and weakens Canada's bargaining stance amidst a trade conflict. Unifor National President Lana Payne criticized the move as an insufficient response to U.S. aggression toward Canada's auto, steel, aluminum, and forestry sectors. She argued that Canada should not eliminate counter tariffs without the U.S. reciprocating by removing all its unfair tariffs, labeling the government's concession as a betrayal of Canadian workers.

Chris Roberts, the national director of the social and economic policy department at the Canadian Labour Congress, urged the Canadian government to adopt a firmer stance against imposed tariffs rather than conforming to what he referred to as the "new normal." He warned that such a course would lead to investment and jobs migrating from Canada to the United States, thereby inflicting severe consequences on vital industries. Roberts called for swift measures to alleviate the economic hardship felt by Canadian employers, workers, and consumers, emphasizing that the current trajectory chosen by the government may not serve the long-term interests of the economy.

This development in Canadian trade policy underscores the complex dynamics between pursuing consumer relief and maintaining a strong position against U.S. trade practices, reflecting broader tensions in international trade relations.