Canada is dropping retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact, Prime Minister Mark Carney announced Friday.

Canada will drop its retaliatory tariffs on most U.S. goods on Sept. 1, Prime Minister Mark Carney announced after a cabinet meeting on Friday.

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 will remove many retaliatory import tariffs on U.S. goods and intensify contacts with the United States on striking a new trade and security relationship, Prime Minister Mark Carney said on Friday.

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.