 As a CEO of a prairie-based company, are you and your leadership team unclear as to what specific Canadian and US products are subject to tariffs? With the long list of US tariff announcements, delays and reprieves since January, and the multiple counter-tariffs announced by Canada, it’s easy to be confused about what Canadian and US products are actually subject to tariffs, and at what rates. As well, the US made all Canadian products that are compliant with the CUSMA (Canada-United States-Mexico Agreement) exempt from their tariffs, with the exception of Canadian automobiles. And so, what products are NOT CUSMA-compliant, and therefore subject to US tariffs? Most of Canada’s counter-tariffs target two specific government lists of products. Each list is hundreds of pages long. So we’ve summarized those lists here for easy reference. Let’s start with the US tariffs on Canadian products. Canadian CUSMA-compliant products:
Canadian non-CUSMA-compliant products:
Note that on April 9th, with Trump decreasing tariffs on most countries to 10% and putting a 90 day pause on the originally announced higher tariffs, it was thought that Canada may be subject to 10% tariffs, possibly across the board, rather than the 25% and 10% tariffs previously announced and implemented almost exclusively on non-CUSMA-compliant products. The US administration then changed, or clarified, their messaging, indicating that the US’s existing tariffs on Canada would not change with this announcement. Now, what Canadian products are non-CUSMA-compliant, and therefore subject to these US tariffs? It’s difficult, if not impossible, to come up with a definitive list. An internet search or AI query will come up dry. Whether a specific product is CUSMA-compliant depends on whether it meets the CUSMA Rules of Origin. As such, the same type of product made by different manufacturers may each have different CUSMA-compliant statuses depending on where they source their parts and materials. For example, an automobile must have 75% of its parts from the US, Canada or Mexico for it to be considered CUSMA-compliant, among other requirements. While a Honda compact sedan may fit these requirements, a Toyota compact sedan may not. Therefore, we were not able to find a “list of non-CUSMA compliant” products, or conversely a list of CUSMA-compliant products. That said, we would expect most prairie-based companies selling to US customers have already become acutely aware of their products being subject to the US’s new tariffs. How about Canadian counter-tariffs on US products? What specific US products are subject to these tariffs? Canada, for its part, has imposed three sets of counter-tariffs:
In terms of specific US products targeted by the March 4 and 13 tariffs, the government of Canada website has a webpage listing each set of products. However, these two webpages are hundreds of pages long and include painstakingly detailed definitions and descriptions of all the different variations of each product. So we’ve summarized them here for easy reference. The following categories of US products are subject to Canada’s 25% counter-tariffs imposed on March 4:
The following categories of US products are subject to Canada’s 25% counter-tariffs imposed on March 13:
See below for our simplified list of the specific products subject to Canada’s March 4 and 13 counter-tariffs. As we can see, Canada’s counter-tariffs on US products are broad. As such, many companies who resell products from the US, or who buy parts or materials from the US to manufacture their products, will see their supply costs increase, as long as these Canadian counter-tariffs are in place, and unless they find substitutes in Canada or elsewhere at similar prices. Even those companies who do not buy products, parts or materials from the US will likely see their costs increase, in the form of upward pressure on wages due to employees’ increasing cost of living. This will also likely put upward pressure on prices from companies’ Canadian suppliers and vendors, who will also experience these wage pressures. Over time, these tariffs, if they remain in place for some time, will likely affect the costs of nearly every company in every industry in Canada. Click here for our simplified list of the specific products subject to Canada’s March 4 and 13 counter-tariffs. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here. The full CUSMA agreement can be found here:
https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between It includes a Rules of Origin document, which can be found here: https://ustr.gov/sites/default/files/files/agreements/FTA/CUSMA/Text/04%20Rules%20of%20Origin.pdf For more detailed legal explanations of the US tariffs and Canada’s response, see this JDSupra article by Toronto law firm Stikeman Elliott LLP. https://www.jdsupra.com/legalnews/back-and-forth-levies-in-the-north-7197083/ *At this point, it is unclear whether US tariffs on steel and aluminum products are all encompassing or only on non-CUSMA-compliant products. The Stikeman Elliott LLP article indicates it only applies to non-CUSMA-compliant steel and aluminum products. While this March 12 Government of Canada announcements make no mention of that: https://www.canada.ca/en/department-finance/news/2025/03/canada-responds-to-unjustified-us-tariffs-on-canadian-steel-and-aluminum-products.html This April 8 government of Canada announcement also makes no mention of it in its summary of Quick Facts of the US’s tariffs and Canada’s counter-tariffs. https://www.canada.ca/en/department-finance/news/2025/04/canada-announces-entry-into-force-of-countermeasures-against-auto-imports-from-the-united-states.html As well, this Government of the United States FAQ page on steel and aluminum tariffs makes conflicting statements saying that “the duties are subject to a free trade agreement” AND that the “duties may not be waived due to a Free Trade Agreement”. https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel/faqs Comments are closed.
|
Archives
December 2029
Categories
All
|
RSS Feed
Copyright © 2018