Canada pauses some US tariffs, denies full suspension

Canada has temporarily paused some of its retaliatory tariffs against the United States, but Finance Minister Francois-Philippe Champagne on Sunday rejected suggestions that all countermeasures have been quietly dropped.

The clarification came as Prime Minister Mark Carney and U.S. Vice President JD Vance met in Rome, following their attendance at the Vatican for the inauguration mass of Pope Leo XIV.

According to a readout from Carney’s office, the leaders discussed “immediate trade pressures and the need to build a new economic and security relationship.”

Vance, in a brief statement, described the encounter as “a casual meeting” focused on their nations’ shared interests and goals, “including fair trade policies.”

Carney, elected April 28 on a pledge to confront U.S. President Donald Trump over trade issues, imposed billions of dollars in counter tariffs after Washington introduced new duties on Canadian goods.

Some temporary tariff relief was announced on May 7 in the Canada Gazette, the federal government's official newspaper. The pause covers products used in sectors such as food and beverage processing, health, manufacturing, national security and public safety. Automakers were also granted a reprieve, contingent on maintaining production and investment in Canada.

The measures received little attention until this week, when Oxford Economics reported that exemptions now covered such broad categories that Canada’s effective tariff rate against the U.S. had dropped to “nearly zero.”

Opposition leader Pierre Poilievre seized on the analysis, accusing Carney in media comments of having “quietly dropped retaliatory tariffs to ‘nearly zero’ without telling anyone.”

Champagne dismissed that claim as misinformation.

“To retaliate against US tariffs, Canada launched largest-ever response -- including $60B of tariffs on end-use goods. 70% of those tariffs are still in place,” he said on X.

His office told AFP that the counter tariffs were “calibrated to respond to the US while limiting economic harm to Canada.”

Champagne’s spokesperson, Audrey Milette, said the six-month tariff pause was intended to give Canadian firms “more time to adjust their supply chains and become less dependent on US suppliers.”

According to Milette, Canada continues to impose tariffs on roughly Can$43 billion (US$31 billion) worth of U.S. goods.

With three-quarters of Canadian exports heading to the United States, the country’s economy remains deeply tied to its southern neighbor. Canada’s latest jobs report indicates that Trump’s trade actions are already having an adverse impact.

The U.S. has levied general tariffs of 25 percent on Canadian goods, along with sector-specific duties on automobiles, steel and aluminum. Some of these have been suspended during ongoing negotiations.