Update on the latest U.S. tariff measures against Canada and the Canadian government’s response
TAXSPOC News Desk
UPDATE: As per the developing news, tariffs were postponed by 30 days.
U.S. TARIFFS ON CANADA: KEY DEVELOPMENTS
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Tariff Implementation: The U.S. administration has officially signed an order imposing tariffs on Canadian imports. The measures include a 25% tariff across all sectors, 10% tariff on energy products, with no exemptions.
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Effective Date: The duties will take effect on Tuesday and will be formally published in the U.S. Federal Register.
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Legal Basis: The tariffs are being implemented under the I nternational Emergency Economic Powers Act (IEEPA), justified by a national border emergency related to fentanyl.
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Duration: These tariffs will remain in place until Canada addresses alleged drug trade concerns, despite limited evidence supporting such claims.
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No Duty Drawback: Unlike typical trade policies where businesses can apply for duty refunds on re-exported goods, this measure explicitly prohibits duty drawbacks – adding further costs for American companies.
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Potential Escalation: The order includes a retaliation clause, warning that if Canada responds with countermeasures, U.S. tariffs could be increased further.
CANADA’S RESPONSE: RETALIATORY TARIFFS AND TRADE MEASURES
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Retaliatory Tariffs Announced: The Canadian government has introduced 25% retaliatory tariffs on $155 billion worth of U.S. goods, with $30 billion taking effect immediately on Tuesday and an additional $125 billion within 21 days. Products targeted include:
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First Wave (Immediate Tariffs): American beer, wine, peanut butter, bourbon, tires, jewelry, fruit juices, apparel, appliances, lumber, plastics, and more.
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Second Wave (After 21-Day Consultation): Vehicles (including EVs), trucks, steel, aluminum, aerospace products, fruits, vegetables, beef, pork, dairy, RVs, and boats.
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Provincial Retaliation: Some Canadian provinces have introduced additional trade restrictions, including banning U.S. contractors from procurement contracts and removing U.S. alcohol from retail shelves.
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Official Tariff List Published: The Canadian government has released an official U.S. surtax order detailing the tariff codes for affected products.
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Remission Application Process: Canada has introduced a remission application process, allowing businesses to apply for relief from tariff payments or refunds for duties already paid.
BEYOND TARIFFS: ADDITIONAL TRADE MEASURES UNDER CONSIDERATION
Beyond tariff measures, the Canadian government is reportedly exploring non-tariff restrictions in areas such as government procurement policies and critical minerals exports. These measures could further impact trade dynamics between the two countries.
SOURCES/ RECOMMENDED READ:
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Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border | White House Pool | Forth
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List of products from the United States subject to 25 per cent tariffs effective February 4, 2025 – Canada.ca
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Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China – The White House
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Orders In Council – Search
Business News Canada tariffs China tariffs Economic Policy executive orders Global Economy international tariffs International Trade Mexico tariffs Supply Chain Tariff Updates trade dispute Trade Policy trade war Trump tariffs U.S. foreign trade U.S. tariffs U.S. tariffs 2025 U.S.-Canada relations
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