Listeners, welcome to Canada Tariff News and Tracker, your trusted source for the latest developments in the world of tariffs, US-Canada trade, and what it all means for Canadians.
This week, the big story is President Trump’s latest moves on tariffs targeting Canadian exports. According to Scotiabank Economics, as of August this year, around 10% of Canadian goods headed for the US are facing tariffs, a substantial drop from 20% a few years ago due to overall trade shifts. But the calm is deceptive. The US government imposed new 50% tariffs on Canadian steel and aluminum back in June, and effective August 1st, a two-tier system hiked duties up to 35% on most Canadian exports failing to meet USMCA rules of origin requirements, with energy and potash carved out at a lower 10% rate.
But listeners, the pressure has only escalated this October. Starting October 14th, the US is raising the average combined countervailing duty on Canadian softwood lumber to 45.16%. The Home Furnishings Association reports that on the same day, tariffs on Canadian upholstered furniture imports to the US jump from zero to 25%, a move stemming from a new Section 232 decision intended, according to Washington, to protect American manufacturers. Section 232 also brings in similar 25% tariffs on kitchen cabinets, vanities, and their parts. While previous exemptions often shielded Canada, these new measures directly target Canadian industries and could send ripple effects through supply chains and consumer prices.
Diplomatic drama is intensifying. Canadian Prime Minister Mark Carney faced off with President Trump at the White House this week, and the tension was palpable. Bloomberg notes that Trump cited the auto sector as an ongoing source of “natural conflict,” while Carney defended the USMCA as essential for healthy North American automotive competition. Carney stressed that “for America to be globally competitive in autos, you need USMCA,” but voiced concern that opinion is sharply divided in DC. Disputes like these threaten to disrupt one of the world’s most integrated auto supply chains. Canadian officials note that around half of the parts in autos assembled in Canada still come from the US, and any breakdown could spell higher costs, parts delays, and uncertainty for automakers like GM and Stellantis, who already are scaling back Canadian investments.
In Congress, moves are afoot to challenge Trump’s blanket tariffs on Canadian goods. Senator Kaine recently reintroduced bipartisan legislation aiming to repeal the new levies after reports of falling product sales and weakening tourism. Still, opposition in the House seems fierce, and there’s no quick relief in sight.
Listeners, with tariff rates on key Canadian exports ranging from 10% on energy to 45% on lumber and 25% on many manufactured goods, the trade environment remains volatile and unpredictable. Stay tuned as negotiations could still carve out exemptions or relief for vital sectors, but, for now, major Canadian exporters are bracing for tough times ahead.
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