Tariffs and Trade

March 12, 2025

New Canadian Counter-Tariffs on U.S. Goods Coming into Effect at Midnight

As of March 13, 2025 the United States’ 25% tariffs on Canadian steel and aluminum came into effect. This morning, the Canadian Government announced its $29.8B counter-tariff response. $14.2B of today’s response included a list of additional U.S. consumer goods that will be tariffed at 25% starting at 12:01am on March 13, 2025. These counter-tariffs are to remain in place until the U.S. removes all of its current tariffs on Canadian goods, steel, and aluminum.

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March 11, 2025

Tariff Watch: U.S. Pauses Some Duties, Canada Holds Firm  

Canada and the United States remain locked in a very damaging trade war begun by the U.S. last week. The situation continues to change by the hour, but here is the latest:

• While the U.S. announced a temporary pause (until April 2, 2025) of tariffs on some Canadian goods that are USMCA/CUSMA compliant, any goods that are non-compliant are still subject to tariffs
• Canada’s initial $30B list of counter-tariffs remains in effect until the U.S. removes all Canadian tariffs
• Implementation of Canada’s secondary $125B list of counter-tariffs has been delayed for now, but the consultation on the contents of this list is ongoing until April 2, 2025
• On Friday, March 7 the government announced new support programs for workers and business affected by tariffs, although their scope is limited

RCC continues to work on retailers’ behalf with the federal and provincial governments to bring an end to this crisis. Last week, RCC joined other business leaders on a mission to Washington DC to advocate for Canada on tariffs.

March 6, 2025

RCC Member Alert: Possible Issues with Customs Brokerage

RCC has been made aware of some customs brokers telling their retail clients that goods shipped through the US but originating elsewhere would be subject to the 25% retaliatory Canadian tariffs. That is not correct.

The 25% Canadian tariffs apply only to listed goods of US production/manufacture.  They do not apply to goods from other countries that happen to be shipped through the US unless there is further significant change made to the product after it enters the US and before it enters Canada.

Simply put, the Canadian government does not care where a product is shipped from, it cares where it was made. So, a Swiss watch bought in Dubai and flown here is Swiss. A Mexican avocado shipped by truck through the US is Mexican, and so on.

RCC has spoken to the senior leadership of the Department of Finance, which sets the tariffs, and they confirm our understanding. We have also alerted the Canadian Society of Customs Brokers, so that they can communicate this to any of their member brokers who have a misunderstanding of the rules.

If you do encounter this problem, please contact Karl Littler, RCC’s SVP Public Affairs at klittler@retailcouncil.org.

March 4, 2025

Canada’s Response to Trump Trade War and What It Means for Retailers

U.S. tariffs and Canadian counter-tariffs came into effect March 4, 2025 at 12:01am. The U.S. tariffs target all Canadian goods imported into the U.S. at a rate of 25% and Canadian energy at 10%. This situation, which retailers and the Canadian government fought hard to avoid, presents significant challenges and the economic costs will be severe.

Canadian counter-tariffs on $155B of US goods will be implemented in two phases:

Phase 1– effective immediately on $30B in goods. These counter-tariffs will apply to US origin goods, determined using the marking rules set out in the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. The phase 1 list was known in advance, and as it is now in effect, is not subject to change.

Phase 2– will take effect on March 25, 2025, and will apply to $125B in goods. The phase 2 list, released today, is larger, and is subject to a 21-day comment period. The federal government has also updated Customs Notice 25-10: United States Surtax Order (2025-1) that provides information on U.S. measures, technical information, proof of origin, calculating surtaxes, exceptions, and other key details.

Key Dates:

• March 12, 2025: Section 232 tariffs on steel and aluminum that the U.S. had imposed in 2018 will be reinstated but the aluminum tariff rate will increase to 25% to match the steel tariff rate. The 2018 list has also been expanded to include new items with steel and aluminum components. This list is now live and can viewed here. We understand that these specific tariffs will be stacked on the general 25% tariffs.
   
• April 1, 2025: The President has said U.S. trading partners that engage in what it considers unfair practices that impact their domestic commercial interests will be subject to new reciprocal tariffs. For Canada, there may be retaliation for our Digital Services Tax and/or the GST.

RCC Action:

RCC continues to engage directly with senior government officials on several fronts. The RCC team will be in Washington DC this week to meet with US and Canadian officials on tariffs and supply chains. We will also be focusing on ensuring that tariff exemptions, remissions, and compensation processes are nimble and responsive to retailers, and to provide members with one-on-one assistance when needed.