March 4th, 2025 | KPMG

On March 4, 2025, Canada outlined its response to the newly imposed U.S. tariffs on Canadian goods. The U.S. has implemented a 25% tariff on all Canadian imports, except energy resources, which face a 10% tariff. In retaliation, Canada has introduced 25% counter tariffs on a wide range of U.S. goods, affecting $155 billion worth of imports.

Key Details:

• The tariffs were originally set for February 4, 2025, but were delayed by 30 days.

• Canada’s counter tariffs are being introduced in two phases:

• Phase 1 (March 4, 2025): Immediate 25% tariffs on about 1,300 U.S. goods, including food products, beverages, appliances, cosmetics, and vehicles.

• Phase 2 (after a 21-day consultation): Expected to cover 4,400 additional U.S. goods, such as passenger vehicles, trucks, steel, aluminum, beef, pork, and dairy.

• The Department of Finance Canada is collecting stakeholder feedback until March 25, 2025, regarding the second phase of tariffs.

• Canada has also introduced a remission program to offer limited tariff relief in "exceptional and compelling circumstances."

• The U.S. de minimis rule, which exempts imports below USD $800 from tariffs, will remain in place for now but may be reconsidered.

Implications:

Businesses engaged in cross-border trade should assess how these tariffs impact their operations. Canada is considering additional non-tariff measures if the U.S. does not reverse its tariffs. Companies affected by these changes are encouraged to seek professional guidance on tariff mitigation strategies.

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