Canadian Counter-Tariffs Remain in Effect on $30 B of U.S. Imports – Including Cosmetics – With Tariffs on a Further $125 B Scheduled for April 2nd
Provinces Proceed with First Countermeasures Including Removal of US Alcohol from Liquor Stores & 25% Surtax on Ontario Power Exports to U.S.
After another chaotic day in America’s roller-coaster trade war on Canada and Mexico, with conflicting and continually changing information coming from Trump’s White House and his Secretary of Commerce, we finally learned mid-afternoon Thursday that Trump was extending the imposition of his 25% tariff on Mexico to April 2nd.
It was not until some hours later, after 4:00 pm, that the news broke that Trump was providing the same delay to his tariffs on Canadian exports to the U.S. Consequently, it took to Thursday evening for Canada’s response to be known which is included in this update.
As CBC News reported, even in announcing this supposed delay or pause, White House officials said the tariff reprieve would only apply to Canadian exports that are “compliant” with the Canada-U.S.-Mexico Agreement (CUSMA).
What Does CUSMA Compliant Mean?
Even with CUSMA, some U.S. importers bringing Canadian goods into the U.S. chose to pay a relatively low U.S. tariff rate (the “most favoured nation” rate) as it was likely viewed as more convenient for them than having to comply with the more complicated CUSMA rules-of-origin policies that allow for entirely duty-free access.
Without this paperwork, these U.S. importers will be subject to the full 25% U.S. tariff rate during this so-called “pause” to April 2nd.
Canadian Finance Minister Dominic LeBlanc indicated Thursday evening that although some U.S. importers have not done all of the required CUSMA related paperwork, it is expected that “the vast majority of Canadian exports to the U.S. are or can quickly become CUSMA compliant.”
Canada to Keep First Round of Counter-Tariffs on $30B of U.S. Imports in Place – Including on Cosmetics – with Second Round on $125B Delayed to April 2nd
Minister LeBlanc is also reported to have said that “it’s not the end of the road” in this trade saga — Trump’s partial climbdown is just another pause and there are more of Trump’s promised tariffs on steel and aluminum coming next week and beyond.
As a result, Canada will not lift the tariffs it levied on $30 billion worth of American goods – including on cosmetics. However, as a show of goodwill, Minister LeBlanc said Canada has agreed to delay its second round of retaliatory tariffs worth $125 billion until April 2nd, when Trump’s batch of so-called “reciprocal” tariffs are due to be imposed on countries around the world.
The following is a breakdown of the product categories of U.S. imports to Canada which have been subject to Canadian counter-tariffs of 25% since 12:01 am, Tuesday, March 4th, and to which the counter-tariffs continue to be applied:
- A swath of poultry products, including turkey, chicken and eggs.
- Dairy products, including milk, cream, butter, yogurt, cheeses, ice cream and margarine.
- Various spices and seasonings, including: vanilla, pepper, cinnamon, nutmeg, thyme, ginger, cumin and others.
- Fruits and vegetables, including tomatoes, cucumbers, citrus fruits, melons, berries and stone fruits.
- Coffee and tea.
- Grain products, including wheat, rye, barley, oats and rice.
- Cooking oil products, including canola, palm oils, and sunflower oils.
- Shrimp and prawns.
- Confectionery products, including flours, sugars, honey, syrups and cocoa products.
- Pastas.
- Prepared bakery products, including pizza, pies, cakes and other pastries.
- Orange juice.
- Nuts and beans.
- Condiments including, mustard, ketchup and other tomato sauces, mayonnaise and salad dressings.
- Soups.
- Bottled water.
- Alcohol, including: wine, beer, cider, whiskey, rum, gin, vodka, brandies and tequila.
- Tobacco, cigarette lighters and vapes.
- Cosmetics, including perfumes and make-up.
- Toiletries, including shampoos, toothpaste, deodorant and soaps.
- Protein powder.
- Plastic building materials, including: flooring, shutters, blinds and doors.
- Bathroom appliances and accessories, including: bathtubs, toilet seats, showers and sinks.
- Suitcases, handbags and other bags.
- Kitchen and glassware, including, forks, spoons, knives and cups.
- Tires.
- Horse saddles and accessories.
- Various clothing items, including: coats, jackets, suits, shirts, skirts, pants, shorts, dresses, underwear, bras, pyjamas, babywear, sports clothing, socks, scarves, gloves and belts.
- Lumber and wood products, including: plywood, beams, fibreboard, windows, shingles, flooring, doors and doorframes.
- Some paper and cardboard products, including: pulp, toilet paper, envelopes, cards and postcards, boxes, bags, food packaging, plates and cups.
- Table cloths, napkins, handkerchiefs and other facial tissues.
- Notebooks, binders, folders and other stationery items.
- Curtains, carpets and other textile floor coverings.
- Blankets, linens and other bedding.
- Camping and other outdoor equipment, including tents, tarps, mattresses, rock climbing harnesses, lifejackets and sails.
- Towels, duster, dish and other cleaning cloths.
- Shoes, sandals, cleats, rubber boots and other waterproof footwear (including ski boots).
- Hats, including safety headgear.
- Jewelry, precious metals and gems.
- Kitchen appliances, including stoves, microwaves, bread makers, hot plates, toasters, coffee makers and portable stoves.
- Dishwashers, refrigerators, freezers and laundry machines.
- Snow plows, snow blowers and lawnmowers.
- Tools such as saws, wrenches, drills, hammers and screwdrivers.
- Shaving products, including razors, shaving cream and after shave.
- Electric hair accessories, including dryers and irons.
- Motorcycles.
- Drones.
- Guns and ammunition.
- Furniture and mattresses.
- Lights, lamps, Christmas lights and light fixtures.
- Arcade games, casino slots and playing cards.
- Art.
The specific tariff categories affecting our industry are:
- cosmetics/personal care products: 3303.00.00 to 3401.30.00
- certain plastic packaging: 3923.21.90 and 3923.29.90
TRADE NOTES & QUOTES
Trump Does Make Changes to Some of his Tariff Categories – A Tacit Admission That the U.S. “Does Not Hold All of the Cards”
Although there was a tacit admission on Trump’s initial tariffs of the U.S. dependency of Canadian energy (by imposing only a 10% tariff on oil and gas rather than the standard 25%), it was noted today that potash is now being reported to be in Trump’s 10% tariff category.
Perhaps learning that Canada is the largest supplier of potash in the world supplying 80% of U.S. agricultural demand – and the reaction of US farmers to facing a 25% increase in the price of fertilizer – got Trump’s attention? All the more reason why a concerted effort to bring home to American consumers what Trump’s tariff war will really cost them in higher prices, job losses, and unnecessary economic turmoil is key to fighting back. It gives proof to the Wall Street Journal’s assertion that this is truly “the dumbest trade war in history”!
Provinces Announce their First Round of Countermeasures
This week has seen various provincial governments announce their first round of countermeasures. These include delisting and even removing U.S. alcohol products from provincial liquor stores (which includes distribution to restaurants, bars, clubs, hotels, private functions, etc.), canceling contracts with U.S. goods and services suppliers, and, in the case of Ontario, imposing a 25% surcharge on the export of electricity as of this coming Monday.
This latter measure will affect some 1.5 million household and business customers in the states of Minnesota, Michigan, and New York. The Ontario Premier, just re-elected to a third term in last week’s provincial election, committed to raise the surcharge to 50%, and perhaps cut off power, if Trump does not back down on his tariff war. Ontario Premier Doug Ford’s Thursday interview on CNN, which was a well-delivered message to Americans, can be found HERE.
Manitoba Premier Wab Kinew Performs Parody of White House Announcements in Announcing the Removal of U.S. Alcohol from Manitoba Liquor Stores
See story and video HERE
Trudeau Says Canada Won’t Relent Until All Tariffs Removed
As reported by CBC news on Thursday, Prime Minister Justin Trudeau said Canada will hold firm and push ahead with retaliatory tariffs and other measures until Trump backs off entirely. “Our goal is to get all tariffs removed,” he said. Canada has a strong hand to play in these negotiations — the U.S. needs the products the country sells and there’s tremendous resolve in Canada to hold firm in the face of Trump’s aggression”, he said.
