* First posted March 4, 2025. This situation is quickly developing. We will continue to provide updates as they become available.

On March 4, 2025, the United States imposed 25 per cent tariffs on imports of Canadian goods, with a 10 per cent tariff on energy and critical minerals. In response, Canada retaliated with a surtax on CA$30 billion of imports of U.S. goods and Canada’s ten provinces have announced their own provincial-level retaliation.

On March 6, 2025, goods from Canada and Mexico that are imported into the U.S. under the Canada-United States-Mexico Agreement (CUSMA) were exempted from the additional tariffs.  Notwithstanding the exemption, reports indicate that 62 per cent of imports from Canada will still be subject to tariffs.

Further, 25 per cent tariffs on imports of steel and aluminum products came into effect on March 12, 2025. In response, on March 13, 2025, Canada imposed 25 per cent retaliatory tariffs on nearly $30 billion worth of U.S. imports, including $12.6 billion in steel products and $3 billion in aluminum products. The European Union is also imposing retaliatory tariffs on €26 billion of U.S. exports to the E.U.

On March 26, 2025, President Trump signed a proclamation to impose 25 per cent tariffs on imports of automobiles and certain auto parts. The tariffs came into effect on April 3, 2025, and apply to passenger vehicles, light trucks, and certain key components. Notably, for autos and auto parts imported under the CUSMA, the tariffs will only apply to the value of the non-U.S. content. In response, on April 3, 2025, Canadian Prime Minister Mark Carney announced that Canada will retaliate against these new tariffs by implementing a 25 per cent tariff on imports of autos imported from the U.S. that are non-CUSMA compliant and a 25 per cent tariff on the non-Canadian and non-Mexican content of CUSMA compliant autos imported from the U.S. Canada’s tariffs will not apply to auto parts, however. It is not yet clear when these measures will come into effect.

On April 2, 2025, President Trump signed an executive order imposing a “Reciprocal Tariff Policy“. This measure implements a 10 per cent duty on all imports into the U.S., as well as higher country-specific duty rates on imports from individual countries. The country-specific duty rates range as high as 50 per cent. The 10 per cent baseline duties come into effect on April 5, 2025, and the country-specific duty rates come into effect on April 9, 2025.

Notably, the Reciprocal Tariff Policy does not apply the 10 percent duty, nor country-specific duty rates to imports from Canada and Mexico. However, the previously implemented tariffs on non-CUSMA compliant goods, steel & aluminum products, and autos & auto parts imported from Canada and Mexico remain in effect.

National Retaliation

Canada’s retaliation to the U.S. tariff measures was originally planned to be implemented in two phases.

The first phase, which began on March 4, 2025, consisted of a 25 per cent surtax on $30 billion in goods imported from the U.S. including products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. The retaliation list includes 1256 tariff items. The surtax:

• Applies to “goods that originate in the United States which means goods that are eligible to be marked as goods of the United States in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations”.
• Does not apply to goods that originate in the United States that are in transit to Canada on the day on which the Order comes into force.
• Canada’s Duties Relief and Duty Drawback Programs (for refunds to Canadian importers) will be available for surtax paid or payable, subject to the provisions of the CUSMA.

The second phase will consist of a surtax on an additional list of imported U.S. goods worth $125 billion.  The Government of Canada issued a Notice of Intent to implement a second round of tariffs and sought views from stakeholders regarding the impacts of tariffs on the products listed. The list includes products such as passenger vehicles and trucks, including electric vehicles, steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles, and recreational boats. Submissions from stakeholders were accepted until April 2, 2025.

Canada’s retaliatory tariffs against the U.S. steel & aluminum tariffs were imposed against a subset of goods on the second phase list.

On March 6, 2025, Canada announced that it would delay the second phase of its retaliation from March 25, 2025, until April 2, 2025. However, as of April 3, 2025, the second phase has not yet been implemented.

On March 7, 2025, Canada announced that it is launching an aid package of more than $6 million for businesses impacted by tariffs. Canada will also relax employment insurance rules to help workers, as well.

The Government of Canada has also established a process for how it will consider remission requests – i.e., requests for relief from payment of tariffs, or the refund of tariffs already paid on imports from the U.S. subject to Canada’s retaliatory tariffs. Remission requests will only be considered in limited circumstances.

Provincial Retaliation

All of Canada’s ten provinces have announced their own provincial-level retaliation. So far, the retaliation consists of a range of actions including removing American products from the shelves of provincial liquor boards, cancelling contracts with American companies, imposing penalties on American companies bidding for provincial procurement contracts, and doubling tolls on U.S.-plated commercial vehicles.

On March 10, 2025, Ontario imposed a 25 per cent surcharge on electricity supplied to the U.S. Ontario’s surcharge was suspended on March 11, 2025, after President Trump threatened to double the tariff on imports of Canadian steel and aluminum products to 50 per cent.

Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes. If you have any questions about the foregoing subject, please do not hesitate to contact us.