Canada Pledges Action Against New Trump Tariffs on Imports

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Key Takeaways

U.S. tariffs on Canadian goods, effective February 4, 2025, are delayed by 30 days for negotiations after a 25% tariff announcement.
Canada plans CAD 155 billion in retaliatory tariffs in two phases; Phase One starts with CAD 30 billion at 25%.
Canada implements initiatives like CAD 200 million for border security and appointing a Fentanyl Czar during the negotiation window.

Canada has announced its plans to hit back against the United States following President Donald Trump’s decision to impose new tariffs on Canadian imports. Trump’s executive order, signed on February 1, 2025, introduced a 25% tariff on nearly all imports from Canada 🇨🇦, along with tariffs on goods from Mexico 🇲🇽 and China 🇨🇳. The U.S. administration cited concerns over border security, illegal immigration, and fentanyl trafficking as the reasons behind the move. While the tariffs were set to take effect on February 4, 2025, both countries have agreed to delay implementation for at least 30 days as of February 3, providing a brief window for negotiations. The pause gives both sides time to address growing concerns about its impact on industries and consumers in two closely tied economies.

Canada’s Retaliatory Plan

Canada Pledges Action Against New Trump Tariffs on Imports

In response to the tariffs, Canada has developed a retaliatory package aimed at hitting back with equal force. The package, worth CAD 155 billion in tariffs, will target U.S. imports in two phases. According to the Canadian government, the measures are being implemented under sections 53 and 79 of Canada’s Customs Tariff law. These sections allow Canada 🇨🇦 to impose additional charges, known as surtaxes, on U.S. goods to counter trade actions deemed harmful to Canada’s economy.

The planned retaliation looks like this:

Phase One: Originally set to start on February 4, 2025, this phase targets CAD 30 billion worth of U.S. imports. A 25% tariff will apply to goods in various categories such as cosmetics, furniture, automotive tires, and household items.
Phase Two: Twenty-one days after the first phase launches, Canada will expand the surtax to another CAD 125 billion in U.S. goods. This phase will likely include high-profile items such as passenger vehicles, aerospace products, and steel.

To enact phase one, Canada’s Order in Council called the “United States Surtax Order (2025)” specifies a detailed list of goods subject to 25% tariffs. These products encompass everyday consumer items and industrial goods imported from the U.S. 🇺🇸, with the retaliatory measures intended to balance the economic impact caused by the American tariffs on Canadian goods.

Products Affected by Canada’s Tariffs

The first wave emphasizes consumer and industrial goods, with several notable categories:

Cosmetics and body care products: CAD 3.5 billion
Appliances and household items: CAD 3.4 billion
Pulp and paper items, tires, and plastic products: CAD 3 billion, CAD 2 billion, and CAD 1.8 billion, respectively
Precious gems and metals: CAD 1.7 billion
Coffee, grains, and cocoa products: CAD 714 million, CAD 600 million, and CAD 569 million, respectively
Orange juice and fruits: CAD 512 million
Wine, spirits, and sugar products: CAD 589 million and CAD 542 million

In phase two, Canada has hinted at targeting products critical to the U.S. economy, such as electric vehicles, beef, pork, and steel. The move is strategic, aimed at creating economic pressure on key American industries while maintaining Canada’s commitments under international trade rules.

Provincial Responses and Non-Tariff Measures

Beyond national measures, some Canadian provinces are initiating their own responses to Trump’s tariffs. These provincial actions reflect a regional approach to addressing what leaders see as unjustified trade barriers:

British Columbia (B.C.): B.C. has instructed all public bodies, including government-owned corporations, to prioritize Canadian-made goods and stop acquiring American products from Republican-led states. Its liquor distribution board has also ceased buying U.S. alcohol.
Nova Scotia: The province plans to remove U.S. liquor from its retail shelves, limit access for U.S. businesses in contracts, and double tolls at one key highway.
Ontario: Ontario has instructed its Liquor Control Board to discontinue American products, blocking restocking for retailers and restaurants.

On a broader scale, the Canadian government is exploring possible non-tariff retaliatory moves. These measures may include restrictions on exports of critical minerals and energy resources or revised procurement rules that favor domestic suppliers. Such policies could have long-term effects on U.S.-Canadian trade and raise tensions further.

Canada’s Initiatives During the Tariff Pause

While both sides press pause on the tariffs for 30 days, Canada is using this time to address some of the concerns related to border security, which Trump cited as one of the main reasons for the tariffs. New initiatives include:

Appointing a Fentanyl Czar to lead efforts against the illegal drug trade.
Declaring drug cartels as terrorist organizations under Canadian law.
Committing CAD 200 million to a new intelligence directive targeting organized crime.
Adding 24/7 surveillance at the U.S.-Canada border with increased technology and staffing.
Launching a Canada-U.S. Joint Strike Force aimed at tackling issues like fentanyl smuggling and money laundering.

Prime Minister Justin Trudeau has said these steps underline Canada’s commitment to working with the U.S. to address mutual concerns, though he remains critical of the tariffs.

Industry Concerns and Political Response

Industry groups in Canada have expressed alarm over the Trump tariffs, with Catherine Cobden of the Canadian Steel Producers Association warning of a severe economic hit. According to Cobden, both Canadian and American industries are at risk, particularly in sectors such as energy and construction, which rely on cross-border supply chains. Further scrutiny from VisaVerge.com also highlights these tariffs’ potential impact on steel and aluminum, critical materials supporting U.S. manufacturing, defense, and shipbuilding.

The political response within Canada 🇨🇦 also reflects intense debate. Opposition parties have proposed alternative retaliatory measures. Conservative Leader Pierre Poilievre called for proceeds from surtaxes to subsidize the steel and aluminum industries, with any leftover revenue returned to citizens as tax relief. Meanwhile, NDP Leader Jagmeet Singh proposed even harsher policies, including a 100% tariff on products made by Tesla, a move aimed at drawing attention to one of President Trump’s key advisers, Elon Musk.

Global Trade Implications

The Trump tariffs and Canada’s retaliation come at a crucial time for global trade. As two highly interconnected economies, Canada and the United States are each other’s largest trading partners. According to Canadian government data, cross-border trade reached nearly CAD 1 trillion in 2024, underscoring the deep integration between the two economies.

The dispute also raises serious questions about the function of international trade agreements. Canada may face challenges in contesting the U.S. tariffs through formal mechanisms, such as the United States-Mexico-Canada Agreement (USMCA or CUSMA). VisaVerge.com’s investigation reveals that while existing trade agreements provide avenues for disputes, they are ill-equipped to address sweeping tariff actions like these. Legal victories may justify retaliatory tariffs but ultimately offer little practical relief in offsetting economic damage.

Anticipating an Outcome

The ongoing pause in tariff implementation provides a critical moment for negotiations to resolve the dispute. Experts suggest that both the U.S. and Canada stand to lose significantly if the tariffs come into effect as planned. By targeting each other’s industries, the actions risk inflating consumer prices, reducing economic growth, and straining diplomatic ties.

As both sides continue discussions over the next 30 days, efforts to find a solution will likely focus on balancing the U.S.’s border security goals with Canada’s demands for fair treatment under shared trade rules. For more details about the Customs Tariff and Canada’s retaliatory actions, official government information is available here.

With much at stake, the next month could determine the future of U.S.-Canada 🇨🇦🇺🇸 trade relations during a challenging time for both economies.

Learn Today

Tariffs → Taxes or duties imposed by a government on imported goods to regulate trade and protect domestic industries.
Surtax → An additional tax, usually imposed temporarily, applied to specific goods or transactions for economic or policy purposes.
USMCA (CUSMA) → The United States-Mexico-Canada Agreement, a trade agreement governing economic relations between the three North American countries.
Retaliatory Measures → Actions taken by a country, like tariffs or other policies, to counter economic harm caused by another nation’s trade decisions.
Fentanyl Czar → A government official tasked with overseeing and combating the illegal trade and trafficking of the drug fentanyl.

This Article in a Nutshell

Canada has unveiled a CAD 155 billion tariff retaliation against Trump’s sweeping U.S. import duties. Targeting key industries like cosmetics, vehicles, and steel, the plan escalates economic tensions. While a 30-day pause allows for negotiations, both economies face rising costs and strained ties. Resolution is critical to preserving mutual prosperity.
— By VisaVerge.com