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Update on Tariffs and Retaliatory Measures

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Update on Tariffs and Retaliatory Measures

Trade & Transportation Federal Policy

Update on March 14, 2025

If you are planning to share your feedback on the counter tariffs through this consultation, please also share your feedback with us. Understanding your tariff concerns will help the Canadian Chamber ensure that our advocacy is aligned with your priorities.

1) ‎Chinese tariffs on Canadian agricultural products

  • Late last week, China's Ministry of Commerce announced tariffs of 100% on Canadian canola oil, oil cakes, and peas and a 25% tariff on Canadian pork and aquatic products. These tariffs cover over $2.6 billion worth of Canadian products.
  • China has explicitly labelled these tariffs as retaliation for Canada's imposition of 100% tariffs on Chinese electric vehicles in Fall 2024. Shortly after Canada announced its tariffs on Chinese EVs, China launched an anti-dumping investigation against Canadian canola seed imports. Current tariffs do not affect canola seed, and the anti-dumping investigation is ongoing.
  • China is a critical export market for the products affected by its tariffs. This will further squeeze producers who are also facing potential loss of access to the U.S. market. Tariffs will also have down-stream effects on other agri-food businesses (e.g., inputs).
  • The Chamber's CEO, Candace Laing, expressed concern with these tariffs in an interview with MSNBC on Sunday, March 9. The Chamber has also issued a statement responding to these tariffs, available on our website.

2) U.S. tariff updates

  • Tariff exemptions for CUSMA compliant Canadian imports into the U.S. until April 2. President Trump announced on March 3 that the tariffs he threatened under the International Emergency Economic Powers Act (IEEPA), namely, 25% across-the-board tariffs & the 10% energy tariff, would enter into force on March 4 at 12:01 a.m. However, on March 6, President Trump signed an Executive Order that temporarily suspended these tariffs on Canadian goods that claim and qualify for CUSMA preference until April 2 (see the related Fact Sheet for more information). Notably, any tariffs that were collected from March 4-6 will not be refunded.

  • According to a White House official that briefed reporters, only 38% of imports from Canada used CUSMA preferences last year whereas 50% of imports by Mexico did. These figures reflect the fact that the Most Favoured Nation (MFN) tariffs via the WTO were 0% or relatively low at the time and there was therefore often not a need for Canadian exporters to utilize tariff preference under CUSMA to ship to the U.S. It is expected that there will now be a shift towards using the CUSMA preference to avoid the tariffs. Economists have come up with different numbers for how many goods the tariff suspension could affect. According to calculations by the Peterson Institute for International Economics, about 85% percent of U.S. merchandise imports from Canada and Mexico may be eligible for preferential tariffs under CUSMA.

  • Finance Canada is interpreting ‘CUSMA-compliant’ trade based on whether companies claim CUSMA preferential treatment when exporting goods to the U.S. (i.e. by completing the necessary trade documentation for CUSMA tariff rates) and whether they meet the CUSMA rules of origin provisions. Additionally, according to Finance Canada, transitioning from Most Favored Nation (MFN) status to CUSMA preference may not be overly burdensome for many companies, as they may already be complying with CUSMA's rules of origin requirements.

  • Other tariff exemptions and adjustments. In addition to the exemption for CUSMA compliant Canadian imports, the following temporary exemptions and adjustments to the IEEPA tariffs against Canada are now in place:
    • There is a lower 10% tariff on any potash imported from Canada and Mexico that falls outside the CUSMA preference.
    • On March 5, the White House announced that a 30 day tariff exemption would be granted for vehicles made in compliance with USMCA “so they are not at an economic disadvantage.”
    • On March 2, an Executive Order was issued that creates a temporary exception for goods eligible for duty-free de minimis treatment from Canada (e.g. shipments valued at less than $800). Per the Executive Order, this exemption will cease to be available once adequate systems have been put in place to collect tariff revenues.

  • Steel and aluminum tariffs (25%) to double – taking effect on March 12. On February 10, President Trump “restored” Section 232 tariffs on steel and aluminum that the U.S. had imposed in 2018, raising the aluminum tariff rate to 25% to match the steel tariff rate. According to the President, the tariffs will go into effect on March 12. On March 11, President Trump made post on Truth Social indicating that the tariffs against Canadian steel and aluminum would double to 50% in response to Ontario’s surcharge on electricity supplied to neighbouring states. The situation remains highly fluid, especially as the Canadian government is expected to respond to this escalation.

  • The U.S. Federal register notices for tariffs on steel and aluminum have been published. These include extended lists of targeted derivative products. Notably, the scope products covered is substantially larger than the scope of products covered in the steel and aluminum tariffs from 2018. Even if your exports were not impacted by U.S. tariffs in 2018, it is important to verify whether your businesses might be impacted by the latest tariffs by checking the tariff codes in the federal register notices. Many downstream products likely will be impacted (e.g. auto parts, furniture, gym equipment, etc.)

3) Canada’s retaliatory tariffs and other responsive measures

4) Finance Canada’s consultation on counter tariffs

Finance Canada has launched its 21-day consultation on the second phase of Canada’s tariff response (25% tariffs on $125 billion worth of imported goods). The consultation webpage can be viewed here.

The government is seeking views on the proposed tariff measures, including the scope of goods targeted by Canada’s second phase of counter tariffs. The list of potential goods that might be tariffed can be viewed here. Notably, this list of goods is cumulatively valued at approximately $200 billion, whereas the second phase of retaliatory tariffs is intended to only capture $125 billion worth of goods. This disparity has been acknowledged by Finance Cananda and points to the fact that there is presently flexibility regarding goods the government might remove from its counter tariff list.

Input on tariff measures should be provided by completing this form. If you wish to provide additional information not included in the form, as well as any additional views or comments you would like to provide on Canada's tariff response, you can also e-mail consultations@fin.gc.ca, and include "U.S. Tariff Consultations" in the subject line. While the notice period ends on April 2, the Government may need to respond to additional tariff threats from the United States before this date. Should the U.S. impose additional tariffs on Canada, the government would consider all options in response.

Note: The $125 billion retaliatory tariff package is presently linked to the 25% and 10% IEEPA tariffs. If the section 232 tariffs on steel and aluminum take effect this week, the Canadian government will respond with a separate retaliatory package that may draw from the existing lists.

Update March 11, 2025

In a new reversal on tariffs, President Trump signed two executive orders on March 6 that temporarily suspended tariffs on various Canadian and Mexican goods that had taken effect just two days prior. After Ontario Premier Doug Ford announced a 25% surcharge on electricity exports to the United States and the U.S. responded by doubling tariffs on steel and aluminum to 50%, these measures are now on hold. The situation remains fluid, and we will continue to monitor developments closely.We will endeavour to continue to keep you informed regarding the latest major tariff developments. For the time being, please see below updates on 1) U.S. tariffs, 2) Canadian counter measures, and 3) Finance Canada’s consultation on the second phase of Canada’s tariff response.

The Canadian Chamber team is closely tracking the latest developments in the U.S., as well as the various responses to the U.S. tariffs by the Canadian federal and provincial governments. Notably, the Canadian Chamber leadership team was also on the ground in Washington D.C. last week to directly make the case against the U.S. tariffs and meet with partners and policy makers to advocate for the interests of Canadian industry.

We remain very interested in hearing your thoughts and concerns on the latest tariff developments. If you are planning to share your feedback on Canada’s counter tariffs through Finance’s consultation, please also share your feedback with us. Understanding your tariff concerns will help the Canadian Chamber ensure that our advocacy is aligned with your priorities.

1) U.S. tariff updates

  • Tariff exemptions for CUSMA compliant Canadian imports into the U.S. until April 2. President Trump announced on March 3 that the tariffs he threatened under the International Emergency Economic Powers Act (IEEPA), namely, 25% across-the-board tariffs & the 10% energy tariff, would enter into force on March 4 at 12:01 a.m. However, on March 6, President Trump signed an Executive Order that temporarily suspended these tariffs on Canadian goods that claim and qualify for CUSMA preference until April 2 (see the related Fact Sheet for more information). Notably, any tariffs that were collected from March 4-6 will not be refunded.
  • According to a White House official that briefed reporters, only 38% of imports from Canada used CUSMA preferences last year whereas 50% of imports by Mexico did. These figures reflect the fact that the Most Favoured Nation (MFN) tariffs via the WTO were 0% or relatively low at the time and there was therefore often not a need for Canadian exporters to utilize tariff preference under CUSMA to ship to the U.S. It is expected that there will now be a shift towards using the CUSMA preference to avoid the tariffs. Economists have come up with different numbers for how many goods the tariff suspension could affect. According to calculations by the Peterson Institute for International Economics, about 85% percent of U.S. merchandise imports from Canada and Mexico may be eligible for preferential tariffs under CUSMA.
  • Finance Canada is interpreting ‘CUSMA-compliant’ trade based on whether companies claim CUSMA preferential treatment when exporting goods to the U.S. (i.e. by completing the necessary trade documentation for CUSMA tariff rates) and whether they meet the CUSMA rules of origin provisions. Additionally, according to Finance Canada, transitioning from Most Favored Nation (MFN) status to CUSMA preference may not be overly burdensome for many companies, as they may already be complying with CUSMA's rules of origin requirements.

  • Other tariff exemptions and adjustments. In addition to the exemption for CUSMA compliant Canadian imports, the following temporary exemptions and adjustments to the IEEPA tariffs against Canada are now in place:
    • There is a lower 10% tariff on any potash imported from Canada and Mexico that falls outside the CUSMA preference.
    • On March 5, the White House announced that a 30 day tariff exemption would be granted for vehicles made in compliance with USMCA “so they are not at an economic disadvantage.”
    • On March 2, an Executive Order was issued that creates a temporary exception for goods eligible for duty-free de minimis treatment from Canada (e.g. shipments valued at less than $800). Per the Executive Order, this exemption will cease to be available once adequate systems have been put in place to collect tariff revenues.

  • Steel and aluminum tariffs (25%) to double – taking effect on March 12. On February 10, President Trump “restored” Section 232 tariffs on steel and aluminum that the U.S. had imposed in 2018, raising the aluminum tariff rate to 25% to match the steel tariff rate. According to the President, the tariffs will go into effect on March 12. On March 11, President Trump made post on Truth Social indicating that the tariffs against Canadian steel and aluminum would double to 50% in response to Ontario’s surcharge on electricity supplied to neighbouring states. The situation remains highly fluid, especially as the Canadian government is expected to respond to this escalation.
  • The U.S. Federal register notices for tariffs on steel and aluminum have been published. These include extended lists of targeted derivative products. Notably, the scope products covered is substantially larger than the scope of products covered in the steel and aluminum tariffs from 2018. Even if your exports were not impacted by U.S. tariffs in 2018, it is important to verify whether your businesses might be impacted by the latest tariffs by checking the tariff codes in the federal register notices. Many downstream products likely will be impacted (e.g. auto parts, furniture, gym equipment, etc.)

2) Canada’s retaliatory tariffs and other responsive measures

3) Finance Canada’s consultation on counter tariffs

  • Finance Canada has launched its 21-day consultation on the second phase of Canada’s tariff response (25% tariffs on $125 billion worth of imported goods). The consultation webpage can be viewed here.
  • The government is seeking views on the proposed tariff measures, including the scope of goods targeted by Canada’s second phase of counter tariffs. The list of potential goods that might be tariffed can be viewed here. Notably, this list of goods is cumulatively valued at approximately $200 billion, whereas the second phase of retaliatory tariffs is intended to only capture $125 billion worth of goods. This disparity has been acknowledged by Finance Cananda and points to the fact that there is presently flexibility regarding goods the government might remove from its counter tariff list.
  • Input on tariff measures should be provided by completing this form. If you wish to provide additional information not included in the form, as well as any additional views or comments you would like to provide on Canada's tariff response, you can also e-mail consultations@fin.gc.ca, and include "U.S. Tariff Consultations" in the subject line. While the notice period ends on April 2, the Government may need to respond to additional tariff threats from the United States before this date. Should the U.S. impose additional tariffs on Canada, the government would consider all options in response.
  • Note: The $125 billion retaliatory tariff package is presently linked to the 25% and 10% IEEPA tariffs. If the section 232 tariffs on steel and aluminum take effect this week, the Canadian government will respond with a separate retaliatory package that may draw from the existing lists.

Update March 1, 2025

With U.S. tariffs being imposed against Canada, businesses should take the necessary steps to prepare for potentially disruptive U.S. trade measures as well as retaliatory measures by Canada. To support your preparations for these coming measures, please see the updates on 1) key U.S. tariff measures, 2) the Canadian federal government’s plans for retaliation, and 3) recent Chamber initiatives responding to the threat of tariffs.

1. U.S. tariff updates

  • Across-the-board tariffs (25%) & energy tariff (10%). President Trump confirmed on Monday that tariff plans would be moving forward on schedule. It was widely reported on Monday that the President was here referring to the 25% tariffs on Canadian goods & 10% tariffs on Canadian energy, which were delayed until March 4 pending a “final economic deal” after Canada agreed to introduce new security measures related to the border. However, the White House has clarified that the President was referring to the reciprocal tariffs, which are separate. The President has indicated via Truth Social on February 27 that they will be coming into effect as scheduled. The Canadian Chamber is engaging with partners in the U.S. as well as the government to gather the latest intel on this. - See the Canadian Chamber’s Business Data Lab’s analysis of the economic implications of a 25% across-the-board import tariff: What the Return of the “Tariff Man” Means for the Canadian and U.S. Economies - Business Data Lab
  • Steel and aluminum tariffs (25%) – taking effect on March 12. On February 10, President Trump “restored” Section 232 tariffs on steel and aluminum that the U.S. had imposed in 2018, raising the aluminum tariff rate to 25% to match the steel tariff rate. According to the President, the tariffs will go into effect on March 12. The U.S. Federal register notices for tariffs on steel and aluminum have now also been published. These include extended lists of targeted derivative products. Notably, the scope products covered is substantially larger than the scope of products covered in the steel and aluminum tariffs from 2018. Even if your exports were not impacted by U.S. tariffs in 2018, it is important to verify whether your businesses might be impacted by the latest tariffs by checking the tariff codes in the federal register notices. Many downstream products likely will be impacted (e.g. auto parts, furniture, gym equipment, etc.)

  • Reciprocal tariffs – taking effect after April 1. On February 13, the President issued a Presidential memo calling for reciprocal tariffs on all U.S. trading partners. The stated objective of this policy is to counter “non-reciprocal trading arrangements” that the U.S. views as unfair to its commercial interests. Unfair trading arrangements are here defined very broadly, and the accompanying White House fact sheet specifically identifies Canada’s digital services tax (DST), and value added taxes (VATs) as issues warranting action. The memo does not set out a specific time frame for new tariffs, only that there should be investigations into non-reciprocal arrangements starting as early as April 1. The European Commission has published a helpful Q&A regarding the U.S. reciprocal tariff policy. Finance Canada is looking into sharing similar guidance.

  • Potential tariffs on autos, pharmaceuticals, and semiconductors (around 25%). On February 18, President Trump said at a press conference that he intends to impose auto tariffs "in the neighborhood of 25%" and similar duties on semiconductors and pharmaceutical imports. According to the President, the tariffs on autos could take effect as early as April 2, whereas he did not provide dates for other tariffs.

2. Canada’s retaliatory measures & tariff remissions

  • On February 1, in response to the initial U.S. tariffs targeting Canada, the Canadian Federal government announced its plans to implement a multi phase retaliatory tariff plan. This plan was paused on February 3 following the U.S. tariffs being delayed until March 4. It will be important to become familiar with the Canadian government’s February 1 retaliatory tariff plan as these measures very likely will be applicable in the event of U.S. tariffs coming into effect next week. The government has also indicated that it may adopt additional non-tariff retaliatory measures, including measures affecting critical minerals, energy, procurement and “other partnerships.”
  • Retaliatory tariff plan. The first phase of the tariff response plan announced on February 1 included tariffs on $30 billion in goods imported from the U.S. This list can be viewed here, and includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. The second phase of the plan includes tariffs on an additional list of imported U.S. goods worth $125 billion. A full list of these goods will be made available for a 21-day public comment period prior to implementation and will include products such as passenger vehicles and trucks, including electric vehicles, steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles, and recreational boats. For more details regarding the mechanism for the implementation of retaliatory tariffs, please review the Customs Notice regarding Canada’s initial set of retaliatory tariffs issued on February 1.

  • Tariff remission. Finance Canada outlined a discretionary remission process for Canadian importers that might have been impacted by Canada’s retaliatory tariffs. The webpage for the remissions process has since been taken down but likely will be re-established soon. The remission process applies to the first round of Canada’s retaliatory tariffs and any subsequent rounds. The Canadian government is considering requests for remission in these two instances: 1) Situations where goods used as inputs cannot be sourced domestically, either on a national or regional basis, or reasonably from non-U.S. sources; and 2) To address, on a case-by-case basis, other exceptional circumstances that could have severe adverse impacts on the Canadian economy. In granting a remission order, the Government of Canada will weigh public policy reasons in the factual circumstances against the policy rationale of the retaliatory tariffs. Questions regarding remission requests can be shared directly with Finance Canada at fin.remissions-remises.fin@canada.ca.

  • Private sector feedback on Canada’s retaliatory measures. Finance Canada is planning to hold a consultation on the broader list of retaliatory tariffs. However, they are also interested in hearing concerns from businesses now, in advance of the formal consultation. They may use any early feedback they receive to tweak their lists and measures. If there are any concerns that you have regarding the impacts of Canada’s retaliatory measures on your business that you would like the government to be aware of, please share with us at your earliest convenience.

3. Recent Canadian Chamber initiatives in response to tariffs

  • Washington D.C. Manufacturing & Supply Chains Mission – March 5-7, 2025: A strategic mission bringing together Canadian-US industry leaders to strengthen supply chain resilience and advocate for Canadian manufacturing interests in the face of evolving trade realities. View the agenda here.

  • All-in Canada Plan. The Canadian Chamber has published a multipartisan All-In Canada Plan that addresses the critical roadblocks that have until now left us dependent on trade with the United States. Among other priorities, such as internal trade barriers, the plan calls for the government to reconvene Parliament so that all parties can get back to work on behalf of Canadians at this critical time.

  • Canada-U.S. Trade Tracker. The Canadian Chamber’s Business Data Lab has developed a Canada-U.S. Trade Tracker that delivers real-time data and actionable insights, equipping businesses and policymakers to defend and strengthen North America’s most important trade partnership.

  • U.S. Tariff Exposure Index. The Canadian Chamber’s Business Data Lab has developed a U.S. Tariff Exposure Index that determines the U.S. tariff risk level of the 41 largest cities in Canada, reflecting both a city’s U.S. export intensity and its dependence on the U.S. as a key export destination. Users can interact with the Index to quickly find relevant information for each of Canada’s 41 Census Metropolitan Areas (CMAs) with populations over 100,000, including local GDP, population figures, trade values, and the number of companies in the city that export to the U.S.

We’ve also been gathering Trade and Tariffs Resources for our business community as listed below:

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