Tax & Trade Blog

While Canadian businesses may have a 30-day reprieve from the threatened Trump and Canadian retaliatory tariffs, businesses should take the opportunity now to put plans in place to minimize the fallout should tariffs be enacted.  One avenue businesses can pursue to mitigate the impact of the tariffs is duty drawback.   

While President Trump’s Executive Order removes the option for American businesses to claim duty drawback, Canada Border Services Agency (“CBSA”) has confirmed that duty drawback remains available for Canadian businesses engaged in the import and subsequent export of goods, even if retaliatory tariffs come into force.

On February 10, 2025, the Canadian International Trade Tribunal (the “CITT”) issued a notice that it was beginning an expiry review in respect of certain Hot-Rolled Carbon Steel Plate and high-strength low-alloy steel plate originating in or exported from Brazil, Denmark, Indonesia, Italy, Japan, and South Korea (the “Subject Goods”).  On February 11, 2025, the Canada Border Services Agency (the “CBSA”) similarly gave notice of the initiation of their parallel expiry review investigation (in respect of “Hot-rolled carbon steel plate 7”).

More details on the technical definition of the Subject Goods can be found here.

In an interesting customs case continuing the Canada Border Service Agency’s (“CBSA”) assault on toy replica firearms, the Federal Court of Appeal (“FCA”) pointed out that allegations of bias leveled at the CBSA and the Canadian International Trade Tribunal (“CITT”) during the appeal process are serious and come with a “correspondingly heavy burden on the party alleging bias to prove the allegations”.  This is not good news for taxpayers and importers who often come to us feeling that the CBSA or the Canada Revenue Agency (“CRA”) has pre-judged their particular appeals, with the end-result in mind.

While the Trump tariffs have so far singled out allegedly unfair treatment of the US by Canada when it comes to border protection and the fentanyl crisis, the question remains if focus might shift to Canada’s supply management system.

A recent announcement from Canada Border Services Agency (“CBSA”) indicated Canada’s dry wheat quota had already been surpassed on January 12, mere weeks into the year.  This raises questions about the fairness of the tariff rate quota (“TRQ”) system for anyone but the largest Canadian importers who have the means to take advantage of it.