OTTAWA — The federal government has shared more of its plan to impose 25 per cent tariffs this week on $30 billion worth of American products ranging from apricots to video-game consoles, plus steps Canadian businesses can take to ask for exemptions.
Government officials shared the details Sunday in a technical briefing for media that was given on the condition the officials not be named or directly quoted. Here’s what you need to know.
Why did Canada choose these goods?
The government thinks Canadian consumers will be able to find alternatives to many of these products, including some made in Canada. The targeted goods were also chosen to maximize the impact in the U.S., given Canada is a major market for many of these exports. This boosts the chances of Canada’s retaliation being noticed by Americans, who might then complain to the White House about tariffs.
The list of targeted products includes some important to states with influential Republicans. The Canadian government officials did not name the Republicans they had in mind, but noted the tariffs on orange juice would hit Florida (where Ron DeSantis is governor), while those on household appliances would hit Ohio (led by Gov. Mike DeWine and home to Vice-President JD Vance) and South Carolina (led by Gov. Henry McMaster). Pennsylvania, a battleground state that Trump won in the 2024 presidential election and is home to a Harley-Davidson factory, would feel the hit of tariffs on motorcycles and coffee.
Could Canada target one company in particular?
Canada is threatening a second wave of 25 per cent tariffs on U.S. goods worth about $125 billion. Officials said the full list of products to be targeted in the next round would be made public in the coming days, after which the government will provide a 21-day period for businesses to look for alternatives.
The Finance Department said Saturday night that the list will include electric vehicles, which raises the prospect of Canada targeting EV maker Tesla and its CEO Elon Musk, a close ally of Trump who is leading the newly created Department of Government Efficiency. An official said the government applies tariffs only to categories of goods, not specific companies. Still, the official said, how the government decides to grant requests for remit could mean certain companies effectively end up being more targeted than others.
What if a Canadian business or sector cannot do without U.S. goods?
The federal government will consider Canadian businesses’ requests for remission for tariffs on U.S. products on the list. If granted, the government would relieve the business from paying the tariff, or refund tariffs it has already paid.
Ottawa could grant a business a remit if the goods cannot be sourced within Canada, or cannot reasonably be obtained from countries other than the U.S. The government will also consider, “on a case-by-case basis, other exceptional circumstances that could have severe adverse impacts on the Canadian economy.”
Ottawa had a similar process in 2018, when it launched countertariffs on many U.S. goods in response to the first Trump administration’s tariffs on Canadian aluminum and steel.
How much will this hurt Canada’s economy?
The Canadian Chamber of Commerce estimates that a trade war between the two countries could shrink Canada’s GDP by 2.6 per cent, or about $78 billion, while the U.S. would see its GDP decrease by 1.6 per cent, or about US$467 billion. Canada’s government did its own assessments accounting for several different scenarios, but officials said they are not ready to share those estimates. Those models are going to need some tweaking, anyway. Until Saturday, officials said, the government did not know definitively what tariffs the U.S. would impose. The scenario that played out on Saturday—25 per cent universal tariffs on Mexico, 10 per cent on China and 25 per cent on Canadian imports except for energy, which has a 10 per cent tariff rate—in addition to tariffs already in place is one they want to look at more closely. The official said the tariffs on Mexico and China will affect Canada’s outcomes, so they need to work those details into the assessment.
How much money will the countertariffs bring to federal coffers?
The government has promised financial support to businesses and individuals suffering losses in the Canada-U.S. trade war, including by redistributing revenue from retaliatory tariffs. Officials say it is too early to say how much that will be. The new trade barriers between Canada and the U.S. will disrupt normal trade patterns, so it is not as easy as calculating 25 per cent of $30 billion. What’s more, remission grants to Canadian businesses would reduce the size of the pool. Eventually, though, the revenue will show up in the Fiscal Monitor, a monthly publication from the Finance Department on the government’s fiscal performance.