Customs duties increased to 35 %: a limited impact thanks to ACEUM

On Friday, the United States brought customs duties to Canadian products they import to 35 %. However, the impact on Canada will be mixed by the Canada-United States-Mexico (ACEUM) agreement, underline experts.

The increase in customs duties affects only a small portion of Canadian exports, they explain.

This increase has an impact on the minority of Canadian productssays William Pellerin, lawyer specializing in international trade law. Canadian products affected by this increase are those that do not comply with the original rules defined by theAceum.

Mr. Pellerin explains, for example, that products manufactured by a Canadian company from a large part of European or Asian materials will be affected by the increase in customs duties.

The Royal Bank of Canada calculates that up to 90 % of Canadian exports may comply with theAceum And so escape from all customs tariffs for the moment. It estimates that the rate of price in force for Canada is approximately 5 %.

Florence Jean-Jacobs, main economist in Desjardins, underlines that Canada is doing quite well.

Canada and Mexico face the lowest prices [parmi les partenaires commerciaux des États-Unis] Right now thanks to this agreementshe said.

Persistent uncertainty

However, Ms. Jean-Jacobs says that the uncertainty generated by frequent changes to American trade policies is difficult for businesses.

Canadian companies face unpredictability that slows down investments and slows growthunderlines Ms. Jean-Jacobs. This is what we have lived for several months and it has a clear impact on Canadian companies.

She adds that this uncertainty creates a situation where The projects are paused, hires are slowed downand that it is also reflected in economic data: the Bank of Canada plans that the gross domestic product of Canada should drop by around 1.5 % in the second quarter of 2025.

The real impact is this inability to plan, this inability to project yourself into the future.

In addition, the sectors already affected by special prices, such as copper, steel and aluminum, continue to undergo high customs duties.

The situation is unbearable for our producerssays François Desmarais, vice-president of the Canadian Association of Steel Producers.

The increase in customs duties has already led to the loss of more than 1000 jobs in the sector, and this trend will continuehe continued.

Jeff Graypresident of the local section 222 of Unifor, expressed the frustration of workers in the face of this situation.

You hear about figures, the number of people losing their jobs in different factories here and there. These are not figures. These are people we know. We know their children, we know their families, they are part of our communityhe said.

On the other hand, there was no guarantee to find a trade agreement with Washington to support these particularly targeted industries, as polerin points out.

None of the economic countries or blocks [qui ont négocié un accord commercial] have not obtained concessions on customs duties on steel or aluminum. They are all stuck with prices of 50 %.

Towards market diversification

Diya Jiang, researcher at McGill University specializing in international trade and Canadian-American relations, notes that Canada’s dependence on the United States limits the country’s ability to respond effectively to fluctuations in American tariff policy.

Even if Canada is already engaged in diversification efforts, the expert specifies that these structural changes take a long time.

Jean-Jacobs, she hopes that the Canadian government will continue its negotiations with the United States to lower the customs duties imposed on all Canadian products. We hope there will be an advance in the negotiations that would make sure that we would have a possibility of economic growth in the 4th quartershe said.