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.

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.

Canada drops select retaliatory tariffs on U.S. goods, aiming to align with CUSMA exemptions and improve conditions ahead of upcoming continental trade talks.

Leaders in the distilled spirits industry said the announcement marks a positive step forward, but noted there is more progress to be made.

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.

Catherine Cobden, president and CEO of the Canadian Steel Producers Association, said Thursday that Ottawa should impose a 50 per cent retaliatory tariff on all U.S. steel, including "immediately ending the ill-advised April reprieve" American steel used in manufacturing and processing.