By David Ljunggren and Promit Mukherjee
OTTAWA (Reuters) -Canada will announce on Friday that it is removing many retaliatory import tariffs on U.S. goods as a goodwill gesture designed to restart stalled trade talks, a source familiar with the matter said.
Canadian tariffs on U.S. autos, steel and aluminum will remain for now, said the source, who requested anonymity given the sensitivity of the situation.
Prime Minister Mark Carney is scheduled to give a press conference at noon Eastern Time (1600 GMT) on Friday.
The news helped the Canadian dollar extend its gains and by 11:05 a.m. it was up 0.5% at C$1.3837 to the U.S. dollar, or 72.27 U.S. cents.
Canada has been holding talks with the United States on a new economic and security relationship for months but the two sides are not close to a deal.
Carney won an April election on the back of a promise to stand up to U.S. President Donald Trump’s tariffs but since then has gradually taken a softer tone.
In late June he scrapped a proposed digital services tax that U.S. companies strongly disliked and in July dropped talk of further sanctions if the two sides could not reach a deal by August 1.
Carney spoke to Trump on Thursday for the first time since June and held what his office called a productive conversation.
Carney’s office did not respond to a request for comment.
Canada would be dropping counter tariffs against goods that are compliant with the trilateral U.S.-Mexico-Canada trade deal, the source said.
The news could be a political challenge for Carney, whose ruling Liberals only have a minority of seats in the House of Commons elected chamber and rely on opposition parties to survive votes of confidence.
The leader of the Conservatives, the largest opposition party, this week accused Carney of taking too soft an approach with the United States.
Carney’s predecessor as prime minister, Justin Trudeau, imposed 25% tariffs on C$30 billion ($21 billion) in goods imported annually from the U.S. on March 6 in response to Trump’s initial duties.
The C$30 billion was part of an overall retaliation plan to target C$155 billion worth of imported goods from the U.S., though the remaining C$125 billion has been delayed.
(Editing by Chizu Nomiyama and Toby Chopra)
