Visit our hub to stay up to date on evolving US tax policies and their impact on Canadian business.
Updated: March 06, 2025
Ongoing tariff directives are creating uncertainty for Canadian businesses, disrupting supply chains, pricing strategies, and international competitiveness. As global trade policies shift—whether through new trade agreements, retaliatory measures, or adjustments in duties—companies must navigate, adapt, and evolve.
Canadian businesses that engage in cross-border trade will need to prepare for the potential impacts of these tariffs and take action to minimize the impact. We can help you navigate these changes and mitigate risks to your business during these uncertain times.
The US has delayed the 25% tariff on goods from Canada and Mexico that fall under CUSMA/USMCA to April 2, 2025.
The US is granting a temporary 30-day tariff exemption for automakers and related parts, at the request of certain car makers that would qualify under CUSMA/USMCA.
The US implemented tariffs, imposing a 25% levy on all Canadian imports of goods, with the exception of energy products that are subject to a 10% tariff. In response, Canada has imposed a 25% tariff on $30 billion worth of specifically identifed American goods coming into Canada immediately. Canadian retaliatory tariffs will then be expanded to an additional $125 billion worth of US goods in the next 21 days, which may allow Canadian companies additional time to plan and find alternative suppliers.
US President Donald Trump says he will end a month-long pause and impose a 25% tariff on most Canadian imports, and 10% on energy, starting March 4, 2025. He reiterated that in addition reciprocal tariffs will begin on April 2, 2025.
Additionally, Trump plans to also implement a 25% tariff on imports from Mexico and an additional 10% tariff on imports from China, also beginning March 4.
US President Donald Trump has announced the potential of reciprocal tariffs on imported goods on Thursday February 13th. These new tariffs will not be imposed immediately but are to be reviewed by his trade and economic team who are to provide a report and presumably recommendations by April. These additional tariffs are to be aimed at countries who currently impose tariffs (or other charges) on imports from the US. Trump stated that the tariffs would vary depending on the specific rates imposed by each country and that they’d be “no more, no less” than what the US is charged.
Many countries in addition to Canada, have various tariffs and other restrictions on certain US imports, some safety related that are currently in place that appear to potentially fall within this current round of proposed tariffs.
It is not clear at this point if these new potential tariffs would in addition to the blanket tariffs initially announced on Canadian and Mexican imports that were deferred at least until March 4, 2025 by Trump just prior to the original implementation date of February 4th.
Additional comments from Trump this week noted the potential of more focused tariffs on the automobile, the semi-conductor chips and pharmaceuticals but as of yet no specific details have been released.
Despite the previous agreement to delay any tariffs for at least 30 days, President Donald Trump signed orders on February 10 imposing 25% tariffs on all steel and aluminum imports—including imports from Canada—to take effect on March 12, 2025. He will also impose a new North American requirement for steel to be “melted and poured” and aluminum “smelted and cast” within the region to limit imports of Chinese steel.
Similar to what was done in 2018 when Trump had imposed a 25% tariff on steel and a 10% tariff on aluminum, the current round of proposed tariffs will be imposed under Section 232 of the Trade Expansion Act of 1962, which gives the president the authority to restrict trade on the grounds of national security. In his first term, President Trump placed tariffs on Canadian steel and aluminum for a year under this Act.
Proposed tariffs between Canada and the US have been delayed for at least 30 days, according to a social media post from Prime Minister Justin Trudeau. This news comes after ongoing conversations between Trudeau and Donald Trump on February 2, a day before tariffs were set to be implemented. In his post, Trudeau reiterated the $1.3 billion border plan, including other measures to combat the flow of fentanyl. In addition, the United States has also agreed to delay the imposition of tariffs on Mexico for 30 days.
Following this announcement, some of Canada’s provinces have stated they will also put proposed retaliatory measures on hold, such as removing or limiting the sale of American alcohol and cancelling provincial contracts with American companies.
A tariff, which is a tax imposed by a country on imported or exported goods, is generally collected and enforced by a country’s customs authority or agency. For example, in Canada, the Canada Border Services Agency (CBSA) administers duties and taxes on imported goods, including tariffs. Tariffs are generally imposed in addition to any customs duties that apply to a specific product. Then, GST and provincial taxes also apply (but can later be recovered in some cases).
As tariffs are in fact, duties, the importer of record is generally responsible for paying any duties/tariffs that are applied. The importer of record could be the buyer or the seller (or some other person). The cost of tariffs is generally ultimately passed on to the final user or consumer.
On March 4, 2025, the federal government announced it will move forward with a 25% tariff on $155 billion in goods imported from the United States. Tariffs will apply immediately to a list of goods worth $30 billion. These initial tariffs affect a variety of goods, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products.
The government also announced it will impose additional countermeasures on $125 billion in imports from the United States, drawing from a list of goods open for a 21-day comment period. The list includes products such as electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks, and buses.
The federal government is also proposing measures to ease the effects of the countermeasures on Canadians by launching a process to allow businesses to request exceptional relief from the tariffs. This “remission process” will allow Canadian businesses to request relief from the payment of tariffs or a refund of tariffs already paid. The federal government said it will consider requests for remission of tariffs that apply beginning on March 4, 2025 to address:
If the federal government decides to impose further tariffs, it notes that the remission process will also be available for those goods.
In addition, many of Canada’s provinces have proposed countermeasures to the tariffs, as of March 4, 2025.
Alberta
Alberta Premier Danielle Smith announced the province will no longer purchase alcohol or video lottery terminals from the US. Alberta also won’t enter into agreements with American companies
British Columbia
BC Premier David Eby has directed the BC Liquor Distribution Branch to stop purchasing American liquor immediately from Republican-led "red states” and remove American brands from public liquor store shelves. He also directed the BC government and Crown corporations to buy Canadian goods first and prioritize BC products. Eby also announced that there will be support for businesses and individuals but didn’t provide further details at this time.
Manitoba
Manitoba Premier Wab Kinew announced the province will pull American liquor off the shelves. He also promised help for those affected by economic fallout resulting from tariffs.
Newfoundland and Labrador
Newfoundland and Labrador Premier Andrew Furey announced the province will pull American liquor off the shelves. He also announced that the province will be reviewing and stopping immediately, where possible, procurement from the United States.
Nova Scotia
Nova Scotia Premier Tim Houston has directed the Nova Scotia Liquor Corporation (NSLC) to remove American liquor from stores. In addition, the province will seek opportunities to cancel existing contracts with American businesses, ban American businesses from bidding on provincial procurements, and reject existing bids . Houston will also double the cost of tolls at the Cobequid Pass for commercial vehicles from the US.
Ontario
Ontario Premier Doug Ford has ordered the Liquor Control Board of Ontario (LCBO) to remove American products, effective March 4, 2025. As the only wholesaler of alcohol in the province, the LCBO will also remove American products from its catalogue so that Ontario-based restaurants and retailers can't order or restock US products. Ontario is also banning American companies from provincial contracts until the tariffs are reversed. In addition, Ford says the province will end its $100-million deal with Starlink.
Ford also announced that Ontario will apply a 25% tariff on the electricity it supplies to Michigan, Minnesota, and New York beginning on March 10, 2025.
Quebec
Quebec Premier François Legault has directed the Société des alcools du Québec (SAQ), to remove all American products from its shelves, starting March 4, 2025. He also instructed the SAQ to halt the supply of American alcoholic beverages to grocery stores, restaurants, and bars. Additionally, Quebec will impose penalties of up to 25% on bids by American companies who participate in public calls for tenders, if those companies aren’t already established in the province.
Legault also announced a new program that will offer loans up to $50 million. The intent is to give companies time to adjust their business models or supply chains over the next 12 months.
New Brunswick
New Brunswick Premier Susan Holt announced its four-pillar response to US tariffs. The plan includes:
These measures are in addition to previously announced measures to:
Prince Edward Island
PEI Premier Rob Lantz announced that the province will take several measures to support businesses to support local businesses, including to:
The imposition of these tariffs is expected to have significant repercussions for Canadian (and American) businesses, and the broader economy. If Canadian businesses act as the importer of record, they will face higher operational costs, which can squeeze profit margins, reduce cash flow, and limit their ability to reinvest in growth. If increased costs are passed on to Canadians, it may contribute to inflation.
On the other hand, if US purchasers act as the importer of record, higher prices could reduce demand for Canadian goods, leading to a decline in exports. This is particularly concerning for vulnerable industries like manufacturing, energy, forestry, and aerospace which rely heavily on US markets. Analysts from the Bank of Canada warn that a drop in exports could weaken Canada’s GDP, slow economic growth, and increase unemployment.
Overall, these tariffs create financial uncertainty for Canadian companies, disrupt trade relationships, and put downward pressure on economic growth. Without effective countermeasures or alternative markets, Canada risks slower economic expansion and potential long-term challenges for key industries.
We can help implement strategies to prepare for escalating trade tensions and help businesses understand how these changes affect them, including providing guidance on:
We’re closely monitoring policy changes and can help you navigate the regulations to find ways to alleviate the effects of tariffs and maintaining cash flow, while staying compliant. Reach out to your advisor for more details on how these tariffs could impact your business.
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