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Trade war: what you need to know about customs tariffs imposed by Donald Trump in Canada

In the absence of agreement, the United States will go ahead with 35 % prices on products from Canada on Friday. Difficult to keep the thread of the situation due to the changes of untimely ideas from the American president, Donald Trump. The duty Take stock of what you have to remember from the trade war right now.

What is the extent of the American prices aimed at Canada?

Thursday evening, President Trump confirmed that the general prices on imports from Canada would increase the 1 % on 1 %is august. Until the end of July, these prices amounted to 25 % for all imports and 10 % for imports of energy, critical minerals and potash.

Except that in reality, these prices do not apply to many products. There is an exemption for products covered by the Canada-US-Mexico (ACEUM) agreement-and this concerns almost the entire exports. Washington has confirmed the maintenance of this exemption.

Concretely, all our energy exports are supposedly exempt, and around 95 % of the rest of our exports are also, according to estimates of experts relayed by the Banque de Canada this week. Thus, prices of 35 % do not apply to much.

In addition to these general rates, there are also specific prices. The United States notably imposes prices of 50 % on steel and aluminum from any other country, including Canada.

How does Canada replies?

Thursday evening, when these lines were written, Canada had not yet reacted. But the counter-extents on products from the United States are still in force. These counter-triggers are 25 % and concern a list of American products which represent imports of approximately $ 95 billion. Exceptions apply in particular for the fields of the automotive industry, health and public services.

Canada also requires 25 % counter-triggers on steel and aluminum imports from the United States.

Other measures, these non-tariffs, have also been announced. The Federal and the Provinces have notably restricted American business access to Canadian public procurement. Only national steel and aluminum producers and those coming from partner countries offering free access to their market can tender on tenders.

Canada also requires stricter rules concerning its steel imports. The goal: to avoid important steel producers-such as China, India or Russia-pour their low-cost production on our market because they can no longer sell it in the United States due to prices.

Other countries have concluded agreements. Why not?

This week, the United States and the European Union have reached a trade agreement providing for customs duties of 15 % on European exports. A few days earlier, Japan also concluded an agreement including 15 % tariffs on Japanese exports. South Korea is doing with prices of 15 %; The Philippines and Indonesia, 19 %; Vietnam, 20 %.

Thursday in the evening, President Trump signed a decree setting the date of entry into force of these rates on August 7. All countries that have failed to conclude an understanding will undergo rates oscillating between 10 % and 41 %.

The Carney government has repeatedly indicated that it did not want to hurry to sign a bad understanding. According to Rosemarie Bégin, principal director in economic and political analysis at PWC Canada, Canada remains relatively spared thanks to the exemption linked to ACEUM. He also still has “a few cards in his game”.

“A country that faces customs tariffs is less competitive than another who does not. But, currently, everyone is more or less affected by American prices. So what we are trying to have to remain competitive is a price a little lower than the others. This is the advantage of negotiating later, we see where we are located, ”said Mr.me Begin.

Mexico has still not signed an understanding either, but it has just been granted a 90-day stay to negotiate with the United States.

What have been the effects on the economy until now ?

The Canadian economy believed 2.2 % in the first quarter of 2025 – a stronger thrust than expected, according to the Bank of Canada. This increase is mainly explained by the fact that “companies have outstripped their orders in anticipation of the entry into force of customs duties”, writes the institution in its report on monetary policy published this week.

In the second quarter, the gross domestic product would have contracted 1.5 %, in particular due to the taxation of customs tariffs, estimates the Central Bank. Exports would have decreased by 25 %. It is also a sort of return from the pendulum, since exports to the United States “clearly dropped” following the Devanance of Purchases which had boosted growth in the previous quarter.

“However, the Canadian economy shows a certain resilience so far,” said Governor of the Bank of Canada, Tiff Macklem. Consumer and companies’ confidence remains low, but it would have improved. Finally, on the job market, “we see losses of employment in the sectors that depend on trade with the United States, but employment has continued to grow in the rest of the economy”.

What help is available for Canadian industries and affected workers?

The federal government has implemented support measures that allow companies to obtain liquidity and postpone certain tax payments. Ottawa has also adopted programs to mitigate the incidence of counter-tale, in particular by allowing eligible companies to import goods without paying customs duties. Aid intended for workers essentially takes the form of temporary softenings for employment insurance.

In Quebec, the border program gives loans to exporters to meet their liquidity needs. Other measures allow, among other things, to support the diversification of export markets, improve productivity and perfect workforce training. At the beginning of June, we learned that the help offered by the province had been practically unused by companies.

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addison.grant
addison.grant
Addison’s “Budget Breakdown” column translates Capitol Hill spending bills into backyard-BBQ analogies that even her grandma’s book club loves.
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