As we blogged on here, the threatened Trump and Canadian retaliatory tariffs stand to have a serious impact on Canadian businesses.  Beyond the anticipatory steps we described previously that can be taken now, businesses should begin seriously considering their options for avoiding or recovering any retaliatory tariffs.

In this Report, we will review some of those options.

Tariff Exemptions

In compelling circumstances, it may be possible for a business to obtain an exemption from the retaliatory tariffs.  Exemptions may be available for businesses that can demonstrate they will be unduly harmed by the tariffs.  For example, if it can be established there are no viable alternatives in the supply chain for inputs required for goods that a business produces, an exemption may be made. 

The imposition of retaliatory tariffs will likely be preceded by a presumably short consultation period.  Businesses should be prepared to take advantage of consultation opportunities to advocate for tariff exemptions and avoid later challenges.

Remission Orders

Similar to options made available to Canadian businesses importing certain Chinese goods in 2024, importers should remain aware of any opportunities to apply for remission.  Applications for remission are reviewed on a case-by-case basis, businesses need to prove that they would be adversely impacted by any retaliatory tariffs and are only granted in exceptional circumstances. Examples include situations where there are no viable alternatives for goods used in production or where businesses are subject to contractual obligations.

Previous remission orders have included deadlines for priority processing.  Businesses should prepare to quickly submit applications to avoid any undue delays and further harm, including obtaining expert advice to ensure applications are submitted correctly.

Duty Deferral Programs

Duty Deferral Programs can also provide opportunities for Canadian businesses importing goods to postpone or even avoid tariffs, provided those goods are eventually exported.

Duties relief allows an importer to avoid paying tariffs at the time of importation while duty drawback allows an importer to obtain a refund of tariffs already imposed.  Any tariff only becomes payable if the qualifying goods enter the Canadian market. Businesses considering these programs should obtain expert advice to ensure their goods qualify and all required information is provided.

Special Tariff Provisions

Canadian businesses should carefully consider the tariff classification of imported goods in case they can be classified under any special tariff provisions. For example, Chapters 98 and 99 of the Customs Tariff list items that are eligible for zero rates. 

Takeaways

The incoming Trump and Canadian retaliatory tariffs are going to pose serious challenges for Canadian businesses. While there are options that can potentially help businesses lessen that impact, ensuring that applications are complete and timely will require expert advice. Businesses should begin working with experts now to ensure there are no delays in obtaining relief later!

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