Canada Tariffs in Response to US Trade Actions

February 2, 2025

Canada has announced a series of countermeasures, including 25% tariffs on a range of U.S. products, in reaction to US tariffs.

Key Points:

Initial Tariffs: Starting in early February 2025, Canada will implement 25% tariffs on $30 billion worth of U.S. imports across selected food and beverage items, consumer goods, and paper products.
Future Tariffs: The government plans to impose additional 25% tariffs on $125 billion worth of U.S. goods. This list will undergo a 21-day public comment period before implementation and includes the auto industry, steel and aluminium, aerospace, and additional food items.
Remission Process: To support Canadian businesses affected by these tariffs, the government is establishing a remission process. This will allow companies to request exceptional relief from the imposed tariffs under specific circumstances.

Implications:

Supply Chain Adjustments: Businesses importing the listed US goods will face increased costs and also potential disruptions in supply chains.
Ongoing Regulatory Updates: The creation of a remission process for specific cases is an example of a new regulatory update. Going forward, businesses should expect increasing changes in regulatory policy related to trade.

Further Actions:

Assess Business Impact: Evaluate the potential cost increases due to tariffs and the supply disruption risks. Develop strategies to mitigate the negative impact and to prepare for additional changes in the global trade backdrop.
Review Import/Export Procedures: Ensure all shipments, regardless of value, are accurately documented and duties are appropriately.
Review the Remission Process: The Canadian government has shared an initial update about the remission process. Businesses can review this specifically and should keep informed about further regulatory updates.

Frequently Asked Questions (FAQ)

Which industries are most affected by these tariffs?
Industries importing US food and beverages, consumer goods, and certain raw materials will be significantly impacted first, with potential future impact in the auto sector and other areas.
What immediate actions should businesses take to comply?
Businesses should review the list of affected products, assess their supply chains, and consider applying for tariff remission if eligible.
Does this policy override previous trade agreements with the US?
These tariffs are a response to US actions and may supersede certain provisions of existing trade agreements temporarily. It's essential to monitor official communications for updates.
Where can businesses find official guidance or templates for compliance?
Official guidance, detailed product lists, and information on the remission process are available on the Department of Finance Canada's website and the Canada Border Services Agency's portal.