Fri Aug 22 16:13:23 UTC 2025: Okay, here’s a news article summarizing and rewriting the provided text, suitable for publication in “The Hindu,” focusing on the implications for India:

**Headline: Canada Drops Retaliatory Tariffs in Bid to Salvage USMCA; Implications for India in Focus**

**Toronto, August 22, 2025:** In a move aimed at resetting trade relations and preserving the United States-Mexico-Canada Agreement (USMCA), Canadian Prime Minister Mark Carney announced on Friday that Canada will drop its retaliatory tariffs on goods covered under the trade pact, aligning with existing U.S. exemptions.

The decision comes ahead of the USMCA’s review in 2026 and is seen as an attempt to preemptively address potential disruptions threatened by U.S. Commerce Secretary Howard Lutnick, who has hinted at a possible renegotiation under President Trump.

“Canada currently has the best trade deal with the United States,” stated Mr. Carney, emphasizing that over 85% of Canada-U.S. trade remains tariff-free. He highlighted the USMCA as a crucial advantage for Canada, particularly given the U.S.’s inclination to charge for market access.

While the majority of goods from Canada and Mexico are protected under USMCA, sector-specific tariffs (known as 232 tariffs) remain on products like steel and aluminum, impacting the Canadian economy. Canada will retain tariffs on steel, aluminum and autos.

**Implications for India:**

While the immediate impact of this move is on North American trade, the situation warrants close attention from Indian policymakers and businesses. The USMCA renegotiation raises concerns about rising protectionism, and the potential for trade diversion if USMCA trade terms become less favorable for Canada and Mexico. This could indirectly affect India by:

* **Shifting Global Trade Flows:** A weakened USMCA could lead to a reshuffling of global supply chains, potentially creating both opportunities and challenges for Indian exporters.
* **Setting a Precedent for Trade Negotiations:** The outcome of the USMCA review could influence future trade negotiations involving the U.S. and other countries, including India. A hardline stance by the U.S. could embolden them to seek similar concessions in other trade deals.
* **Highlighting the Importance of Diversification:** India’s reliance on specific markets underscores the need to diversify its export destinations and strengthen trade ties with a broader range of countries to mitigate risks associated with shifting trade policies in major economies.

The development underscores the increasingly complex and unpredictable nature of international trade, emphasizing the need for India to proactively adapt its trade strategies and strengthen its economic resilience.

**Note:** This article is written from the perspective of *The Hindu*, focusing on the Indian perspective of the news, as requested.

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