Tax & Trade Blog

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"RETALIATORY TARIFFS - STILL A BAD IDEA?

UNILATERAL FREE TRADE WOULD BE A BETTER ECONOMIC IDEA

 The trade relationship between the United States (“US”) and Canada has eroded with tensions devolving into a trade war.

As of today, the US imposed tariffs on Canadian goods appear to be "off again" until April 2^nd, but Canada's first round of "retaliation tariffs" are still "on" ("CT-R1").   That is strange.  Canada is "on" despite no current US tariffs to retaliate against?  Is Canada now the sole aggressor?

Should this on-again-off-again trade war continue to escalate, the US will likely impose even further reciprocal tariffs on Canadian goods, along with additional tariffs on Canadian steel and aluminum products, and timber, lumber and derivative products. In turn, Canada is planning to implement a more robust second round of tariffs targetting an additional $125 billion in US goods ("CT-R2").  

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TARIFF UPDATE 101

TRUMP TARIFFS, CANADA'S COUNTERMEASURES TAKE EFFECT

The trade dispute between the United States (“US”) and Canada has now entered a new phase, as the US imposed 25 percent tariffs on Canadian goods and 10 percent tariffs on Canadian energy products on March 4, 2025 .  Canada responded in kind and implemented the first phase of its previously announced retaliatory countermeasures through the United States Surtax Order (2025-1) .  The list of targetted US origin goods remains the same as the prior list , but for the addition of 14 new items under Chapters 98 and 99 of the Customs Tariff Schedule, although these new items appear to be absent from a news release published by the Department of Finance Canada.