Navigating Tariffs: Help Us to Help You

On April 2, President Trump unveiled the details of the much-anticipated “Liberation Day” reciprocal tariff measures. The new tariff measures took effect on April 9 at 12:01 a.m. ET and have already sent shockwaves across the global trading system and roiled global markets. Dozens of impacted countries have already responded. However, the situation remains very fluid. 

Yesterday afternoon, the President announced via Truth Social that there will be a 90-day pause on the reciprocal tariffs that will hold them at 10% for all countries except China. According to this post, U.S. tariffs on Chinese imports will increase to 125% “based on the lack of respect that China has shown to the World’s Markets.” Given Canada and Mexico are exempted from the reciprocal tariff measures via CUSMA compliance, this new development doesn’t significantly change things for Canada.

To help members navigate these latest tariff developments, HRAI is forwarding herewith an overview of the U.S. reciprocal tariff measures as prepared by the Canadian Chamber of Commerce, as well as a preliminary analysis of implications for Canadian industry, Canada’s latest retaliatory measures, and a compilation of some key resources.

HRAI and its allies also continue to engage with federal officials to elevate business priorities related to the U.S. tariffs and Canada’s responsive measures. We are very interested in receiving your input and guidance.

In particular, we are interested in your input on the following:

  • The HS codes for affected products that your company deals with and any submissions you have made for the federal government’s consultations.
  • Data and examples on how your company is trying to get products to become CUSMA-compliant.
  • Your view of any tariff support measures that your organization needs from government.

Feel free to contact Martin Luymes at mluymes@hrai.ca, Perry Chao at pchao@hrai.ca or

Canadian Chamber of Commerce Summary of Recent Activities

April 2 U.S. Reciprocal Tariffs

  • Reciprocal tariffs. In short, the reciprocal tariff executive order signed by the President on April 2 invokes national security to introduce a universal 10 percent tariff on all imported goods took effect on April 5, followed by further tariffs on dozens of named countries that took effect on April 9. See the full list of country-specific reciprocal tariffs here. The stated intention of the tariffs is to respond to persistent annual U.S. goods trade deficits and related underlying conditions (e.g. lack of reciprocity in trade, disparate tariff rates, non-tariff barriers, etc.). Many of the underlying trade challenges are identified in the April 1 USTR Report to the President on the America First Trade Policy and the March 31 USTR 2025 National Trade Estimate Report on Foreign Trade Barriers.
  • Sectoral exemptions for the reciprocal tariffs. There are some notable sectoral exemptions to the reciprocal tariffs that are outlined in Annex II of the Executive Order. Notably, these include copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products.
  • Canada and Mexico presently exempted from the reciprocal tariffs. The White House Fact Sheet for the reciprocal tariffs and subsequent reporting make clear that Canada and Mexico are presently exempted from the latest reciprocal tariff measures. For Canada and Mexico, prior IEEPA tariff measures (including the tariff exemption for CUSMA compliant goods) remain in effect and are unaffected by the new reciprocal tariff measures. This means CUSMA compliant goods will continue to see a 0% tariff, non-CUSMA compliant goods will see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff. In the event the prior IEEPA measures are terminated, CUSMA compliant goods would continue to receive preferential treatment, while non-CUSMA compliant goods would be subject to a 12% reciprocal tariff. 
  • Steel, aluminum, and auto tariffs impacting Canada remain in effect. There are major tariff measures in place that are unaffected by the latest exemption that will continue pose significant challenges for Canadian businesses. Notably, this includes the 25% Section 232 tariffs on steel and aluminum (and derivative products) that took effect on March 12. Additionally, the 25% Section 232 tariffs on automobiles and auto parts that took effect on April 3. See the annex to the Executive Order and the CBP guidance for more information regarding the auto tariffs.
    • See here analysis from the Canadian Chamber’s Business Data Lab outlining why Canada-U.S. auto supply chains cannot be easily be reconfigured. 
  • Canada faces major tariff risks on the horizon (lumber, pharmaceuticals). The reciprocal tariffs don’t change the status quo for Canada. Canada is already facing significant tariffs that are much higher than normal. Per Finance, we have gone from nearly all Canada-U.S. trade being tariff free to nearly 50% of Canada-U.S. trade facing tariffs. Most CUSMA-compliant goods continue to be sheltered from tariffs, but major manufacturing sectors — steel, aluminum and automotive — remain highly exposed. Other key Canadian exports — most notably lumber products — also remain targeted by pending section 232 investigations.  The Trump administration has also threatened section 232 investigations of other key exports for Canada, including pharmaceuticals. Notably, the President reiterated yesterday that he intends to soon announce “major” tariffs on imported pharmaceuticals.

 Canada’s response to the latest U.S. tariffs

  • Counter measures in response to U.S. auto tariffs. On April 3, the federal government announced a series of counter measures in response to the U.S. tariffs on autos and auto parts (news release). These counter tariffs took effect on April 9 at 12:01 a.m. ET. According to Finance Canada, the intention of these measures is to largely mirror the U.S. actions. The counter measures include:
  1. 25% cent tariffs on non-CUSMA compliant fully assembled vehicles imported into Canada from the United States;
  2. 25% tariffs on non-Canadian and non-Mexican content of CUSMA compliant fully assembled vehicles imported into Canada from the United States; and,
  3. Canada to develop a framework for auto producers that incentivizes production and investment in Canada (details and effective date to be announced soon). Notably, Canada’s counter measures will not target auto parts. 
  • Phase 2 of Canada’s retaliatory tariff plans on hold. The government has paused its plans to implement a tariff package valued at $125 billion worth of goods. A public consultation was launched regarding the content of this second tariff package on March 4, with feedback due by April 2. Finance Canada has received 6,600 comments on the phase 2 tariff package (including a submission from HRAI). At present, the government’s intention is for Canada’s response to the latest US measures to be limited to the counter tariffs on autos, and the counter tariffs on steel and aluminum. 
  • Potential early renegotiation of CUSMA/USMCA. There is a consensus among both major parties in Canada that a review and/or renegotiation of the CUSMA is needed. On April 2, PM Mark Carney stated that he believes the “our old relationship of steadily deepening integration with the United States is over” and there needs to be “a renegotiation and a reaffirmation of which elements of the commercial relationship, the trading relationship, stand." Conservative Leader Pierre Poilievre has expressed similar views regarding the bilateral relationship and on April 2 explicitly stated that as PM he would advocate to expedite a review and renegotiation of CUSMA. Given recent developments, and USTR’s focus on the 2026 CUSMA review, it seems likely that the planned review of the Agreement will take place earlier than scheduled. 

Key resources

  • See HERE a comprehensive overview of the federal government’s supports in response to tariffs (as of April 4). This includes details regarding liquidity supports for businesses, the remission framework for relief from Canada’s counter tariffs, duties relief program, duty draw back program, and supports for farmers, among others.
  • To better understand what steps are required to become CUSMA compliant, please review this helpful FAQ by the Trade Commissioner Service. 
  • See HERE the Government of Canada’s comments for the USTR Federal Register Notice on reciprocal tariffs. This document provides a helpful overview of responses to arguments made by the Trump administration for implementing tariffs targeting Canadian goods.

Recent Canadian Chamber insights in the media 

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