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Key Moment
Steel And Aluminum Tariffs Begin
All countries, including Canada, are hit with a 25% steel and aluminum tariff on March 12. Canada is expected to retaliate with their own dollar for dollar tariffs that start March 13.
These tariffs are on top of the existing 25% tariffs for goods entering the US.
The US is ready for reciprocal tariffs with their own dollar for dollar policies which start on April 2. It's expected there might be an escalation in the trade war as both countries attempt to counter each other's reciprocal tariff policies.
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News
Steel And Aluminum Tariffs Now 50%
In response to the Ontario energy levy, Trump has increased the Steel & Aluminum tariffs to 50%. Those tariffs were originally at 25% and were expected to start March 12.
Trump hasn't ruled out the possibility for further increases based on Canada's response. These tariffs are cumulative to the existing 25% on all non USMCA goods.
March 11 Update: The tariffs are back to 25% as Doug Ford temporarily removed the energy levy in a bid to negotiate a new USMCA deal ahead of April 2, 2025.
See source.
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Ontario Counters With 25% Energy Levy
Ontario is immediately imposing a 25% surcharge on all U.S.-bound electricity as part of its retaliatory measures against U.S. tariffs.
This move highlights how Canadian provinces are gearing up to counteract trade restrictions, with more U.S. tariffs expected in the coming weeks.
The new policies include phased responses, adjusting based on whether the tariffs proceed. Premier Doug Ford emphasizes that while he “[does] not want to do this,” he views it as a necessary step to protect Canadian jobs. He also didn't rule out the possibility of shutting off electricity to the US entirely.
March 11 Update: The levy is paused while Doug Ford and Canadian leaders negotiate for a new USMCA deal ahead of April 2, 2025.
See source.
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News
U.S. Delays USMCA Goods By 1 Month
Trump temporarily delayed the 25% tariffs on USMCA-compliant goods from Canada and Mexico for one month, exempting them until April 2.
USMCA goods are products that meet the trade rules under the United States-Mexico-Canada Agreement, allowing them to qualify for tariff-free or reduced-tariff treatment. This move aims to reduce economic disruption and provide room for further trade negotiations. More news are expected as talks continue.
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U.S. Delays Auto Tariffs By 1 Month
The U.S. announced a one-month delay on auto tariffs following appeals from major American carmakers, including Ford, GM, and Stellantis, who warned of severe industry disruptions. However, US reciprocal tariffs are still planned to take effect on April 2 and this pause is seen as a temporary window to give the auto industry time to adjust.
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Insight
New Survival Strategy: Provincial Loans
Quebec’s response to U.S. tariffs highlights how provincial financing can help mitigate trade disruptions. The province is offering local businesses loans of up to $50M with flexible repayment terms, similar to the support provided during the COVID-19 pandemic.
Quebec joins other provinces such as Ontario, British Columbia, Manitoba, and Nova Scotia in unified economic retaliation measures, such as banning U.S. alcohol sales.
Quebec is the first to announce their loan programs but other provinces are likely to follow given the unified response so far. Keep an eye out for similar relief programs in your province over the coming days and weeks.
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News
Insight
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Today, at 12:31 UTC, Canada’s own Chrystia Freeland hinted that if the US imposes a 25% tariff, Canada would respond dollar-for-dollar, starting with 100% tariffs on key US exports like Tesla vehicles and U.S. wine, beer, and spirits.
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News
Key Moment
Trade War Starts: Canada Retaliates With $155 Billion Counter-Tariffs
Canada imposes 25% tariffs on $155 billion worth of U.S. goods in response to U.S. tariffs, with a first wave targeting $30 billion in imports like food, beverages, appliances, and apparel starting March 4, 2025.
A second wave of $125 billion in tariffs will follow, affecting vehicles, steel, aluminum, aerospace, and agriculture, pending a 21-day public comment period. These measures are designed to retaliate strategically, hitting key U.S. industries while protecting Canadian workers and businesses.
Canada is also preparing non-tariff measures and a remission process to ease domestic economic impacts.
View more information on relief here.
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Tariffs Expected To Start March 4th
Trump’s 25% tariffs on Canadian goods are set for March 4, with steel and aluminum tariffs on March 12 and reciprocal tariffs in early April.
While Canada originally secured a 30-day delay, Trump insists the tariffs, including reciprocal ones taxing imports at the same rate as U.S. exports, will move forward. If imposed, Canada plans to retaliate with $155 billion in countermeasures.
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Insight
Fading Interprovincial Trade Barriers
Canada’s economy is held back by a tangle of inconsistent provincial rules that make it harder to do business across borders, from extra inspections to conflicting product standards.
Experts estimate that eliminating these barriers could boost GDP by up to 7.9%, unlocking billions in economic growth. With growing awareness across political parties, leaders from all sides are signalling a push for solutions, making action on interprovincial trade reform increasingly likely.
Businesses can start to capitalize on this increased level of awareness and the
surge for "Made In Canada" to boost trade between neighbouring provinces. Connecting with partners is easier than ever, opening up a largely untapped market.
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Trump Announces Retaliatory Policies
The U.S. is pre-emptively introducing reciprocal tariffs, matching the duties and trade barriers imposed by other countries.
If Canada imposes its own counter-tariffs, the US will consider invoking these new policies which could also stack on top of the existing 25% on Steel and Aluminum. Canadian provincial leaders are still in D.C. looking for an economic deal.
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Insight
A Surge For "Made In Canada"
Canadian businesses and consumers are doubling down on local suppliers. Recent polls show an uptick in Canadian nationalism as individuals are looking to support the Canadian market in any way they can.
There is a massive opportunity for businesses that position themselves as the go-to Canadian option. If you can deliver quality, consistency, and a local “Made in Canada” narrative, you’ll win big in this shift in market dynamics.
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News
Steel And Aluminum Additive Tariffs
Trump suddenly announces a 25% tariff on all steel and aluminum imports, including from Canada and Mexico, sparking criticism from Canadian officials and industry leaders.
The tariffs will be additive to any other tariffs and will start in about a month. Canadian politicians condemned the move with some calling for an early renegotiation of the USMCA trade deal.
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Canadian Economic Summit Announced
Trudeau announces a joint Canada-U.S. Economic Summit to be had on Friday February 7, 2025. The goal is to find a path towards a no tariff policy, increasing investments and easing internal trade barriers. It will also explore opportunities to break down barriers between provinces and territories.
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Tariffs Delayed Until March 2025
After meeting with Trudeau the Trump Administration has decided to delay the tariffs by one month to March 2025. In return Canada has announced a 1.3B dollar plan to tackle the illegal movement of drugs between the borders. It's still unclear if the tariffs will stick but negotiations will continue behind the scenes. Analysts believe some tariffs will still land as Trump eyes to reduce the debt deficit in the United States.
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Fiscal Support
Canadian Relief For Impacted Businesses
Canada is offering businesses a path to tariff relief through a remission process.
Companies that rely on U.S. imports and face supply chain challenges can request tariff exemptions if goods are unavailable from Canadian or non-U.S. sources, or if tariffs would cause severe economic harm.
Eligible Canadian businesses must provide detailed documentation on sourcing limitations, production costs, and economic impact.
Zero Draft AI will help streamline the application process for any impacted businesses looking to file for these claims.
Book a free consultation and get actionable insights for your business free of charge.
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Insight
AI, Crypto And TSMC To Be Impacted
Trump has consistently announced that he will be placing tariffs on foreign produced computer chips, semiconductors, and likely a ban on usage of foreign AI. This will likely spark rising costs for Canadian businesses as well.
AI Impact:
- Higher Infrastructure Costs: Nvidia GPUs and AI server components will become more expensive. These prices are likely to trickle into non-US markets to compensate for profit losses.
- Investment Shifts: AI firms may divert funds from R&D to manage rising costs and shifts in legal policy. Canada is likely to capitalize on this with their existing Pan-Canadian AI strategy with a focus on commercialiation.
Crypto Impact:
- Rising Mining Costs: More expensive GPUs could reduce mining profitability going forward. If so, this might translate into higher prices for crypto assets.
- Hashrate Migration: Miners may relocate to regions with lower costs and stability in their fiscal policy.
TSMC Impact:
- Chip Pricing Pressure: As the world’s largest semiconductor foundry, TSMC faces higher costs for exporting to the U.S., potentially impacting Nvidia, AMD, and Apple. This will impact consumer products like laptops and smartphones but also any businesses that depend on cutting edge chips.
- Production Relocation Challenges: TSMC’s Arizona plant may become more critical, but scaling domestic production is slow and expensive. It will likely take multiple years before we see any meaningful output from any US based computer chip manufacturing plants.
AI, Crypto, and Semiconductor firms must brace for rising costs, supply chain shifts, and potential production realignments.
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News
Counter Tariffs Announced
Canada will impose a dollar for dollar 25% tariff on C$155 billion of U.S. goods in response to U.S. tariffs, with C$30 billion effective Tuesday February 2 and the rest in 21 days. Prime Minister Trudeau warns of economic harm to the U.S. and urged Canadians to support domestic products and travel.
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Insight
Steel And Aluminum At Risk
The Globe and Mail reports that the US government will impose 25% tariffs on Canadian goods starting February 4. This strategic move is poised to escalate trade tensions, potentially affecting key sectors like steel and aluminum.
Manufacturers and business owners, especially those operating cross-border, should brace for increased cost and a ripple effect in supply chains as the dispute unfolds.
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News
Trade War Begins
Trump confirms Canadian tariffs which are expected to take into effect on Tuesday February 2. Canada and Mexico are hit with 25% tariffs while China is hit with 10%. Trump is hoping to prevent the movement of illegal drugs and migrants on the US border. It's unclear if he will lift the tariffs even if those issues are resolved as he eyes for tariffs across the EU and Asia as well.
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Insight
Ripple Effect On Consumer Spending
No matter what industry you work in, tariffs will impact consumer spending.
In 2018, the U.S. imposed a 25% tariff on steel and 10% on aluminum, raising costs for Canadian producers, who passed these onto consumers.
For example, washing machine prices in the U.S. rose 12% due to these tariffs.
Increased raw material costs affected various sectors, leading to higher prices for goods and services, which strained household budgets and reduced spending.
The tech industry will also likely raise prices due to higher costs from affected sectors.
This chain reaction—from tariffs to increased costs and reduced spending—is something businesses and consumers must monitor closely.
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Insight
Tariffs Likely To Stick
Both countries have shown commitment to escalating back and forth tariffs. Canada is, unfortunately, positioned to lose more from this exchange.
It is unlikely the tariffs will quickly settle due to Trump's desire to reduce the deficit. Since Canada is their largest trading partner they are a likely candidate for long term tariffs.
Manufacturers should especially brace for the impacts since they will experience costly supply chain disruptions. Some markets might not event remain profitable anymore. They should all keep eye to any federal announcements as they contain important information for claiming fiscal support.
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Canada To Retaliate Against Tariffs
A series of reports detailed Canada’s possible targeted retaliatory approach (drawing on past examples like specific tariffs on Florida orange juice and select whiskeys) and noted that this will likely trigger a trade war between the two countries.
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News
Key Moment
Trump Announces 25% Import Tariff
After campaigning on implementing tariffs against US trading partners, president Trump follows through by announcing 25% tariffs against Mexico and Canada. China is expected to also receive a 10% tariff and they are expected to be declared on Saturday February 1st.
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