- Background information
- What is Canada’s plan in response to U.S. tariffs?
- Support for Canadian businesses and workers
- How can Canadians help?
By Government of Canada
The government of Canada has a comprehensive plan to fight back against the unjustified US tariffs imposed on Canadian goods while supporting Canada’s interests, industries, and workers.
Background information
On March 4, 2025, US tariffs of 25 percent on Canadian goods, and 10 pe cent on energy exports from Canada imported into the US from Canada, came into effect. The US has indicated that this action is in response to national security concerns, particularly related to illegal immigration and the flow of fentanyl and other drugs into the US
The US has also announced that it may impose additional 25 percent tariffs on certain industries, including steel, aluminum and autos on March 12.
Canada-US trade
Canada and the United States have the world’s most comprehensive and dynamic trading relationship, which supports millions of jobs in both countries. We are each other’s largest trading partners with US$2.5 billion worth of goods and services crossing the border every day.
What is an import tariff?
An import tariff is a charge imposed by a government on an imported good. Import tariffs are a source of revenue for the government and can serve to protect domestic industries from foreign competitors.
Impacts of US tariffs
Individuals
The US tariffs will impact Canadians and Americans alike. They will increase costs for consumers, put thousands of jobs at risk, and weaken North America’s competitiveness in the global economy. Tariffs will upend production at US auto assembly plants and oil refineries, and raise costs for American consumers—at gas pumps and grocery stores, whether for products made in Canada or US-made products that use Canadian materials, putting American prosperity at risk.
Businesses
Canadian companies that rely on cross-border supply chains will face logistical and financial challenges. Businesses will likely see reduced demand from US buyers due to increased prices, slowing overall economic growth in Canada.
With many US businesses relying on Canadian imports, tariffs on Canadian goods and materials will raise prices considerably for American businesses and consumers, leading to inflationary pressures in the US Tariffs will also disrupt American supply chains, which could cause delays and increased costs, making American-made products more expensive.
Due to the sudden uncertainty around trade relations, businesses on both sides of the border could delay investments, further slowing growth.
What is Canada’s plan in response to US tariffs?
On March 4, 2025, the US imposed tariffs of 25 percent on Canadian exports, and 10 per cent on energy product exports from Canada.
Canada has responded to the US imposition of tariffs on Canadian goods by introducing a first set of countermeasures designed to compel the US to remove the tariffs as soon as possible.
Canada’s countermeasures include:
- Imposing tariffs on $30 billion in goods imported from the U.S., effective March 4, 2025.
- Canada’s countermeasures list includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain paper products.
- Announcing that the government intends to impose tariffs on $125 billion in imports from the U.S.
- This second round of tariffs will be subject to a 21-day comment period prior to implementation, and includes products such as electric vehicles, trucks and buses, certain fruits and vegetables, aerospace products, beef, pork, and dairy.
All options remain on the table as the government considers additional measures, including non-tariff options, should the US continue to apply unjustified tariffs on Canada.
More information on Canada’s tariff response
Impacts of Canada’s tariffs
Canadian countermeasures are about protecting and defending Canada’s interests, consumers, workers, and businesses. Applying tariffs on US goods being imported into Canada raises the prices of those goods for sale in Canada, making them less desirable for Canadian consumers to purchase. By raising prices and reducing their demand by Canadian consumers, this sends a message to US businesses and the US government on the need to reverse the imposition of tariffs, for the benefit of both Canadians and Americans.
At the same time, to help reduce the financial burden on Canadian consumers as a result of higher prices on American products, the government of Canada encourages Canadian consumers to switch from purchasing American products to those made in Canada. This will also help support Canadian businesses by increasing their domestic sales, especially if their exports are impacted by US tariffs.
Support for Canadian businesses and workers
As a first line of defence, Canada’s robust system of economic support programs is available to help businesses and workers directly impacted by US tariffs. This includes financing and advisory supports for businesses through financial Crown corporations and supports for workers.
Some of the supports that are already available include:
- Trade Commissioner Service
The Trade Commissioner Service helps Canadian businesses grow with confidence by connecting them with its funding and support programs, international opportunities, and its network of trade commissioners in over 160 cities worldwide.
- Business Development Bank of Canada
Business Development Bank of Canada (BDC) provides financing solutions and advice to small and medium-sized businesses in all industries and at every stage of growth.
- Export Development Canada
Export Development Canada (EDC) helps Canadian companies of all sizes succeed in global markets with trade knowledge, financial solutions, insurance, equity and connections.
- Farm Credit Canada
Farm Credit Canada (FCC) is a dedicated lender for the agriculture and agri-food sectors and provides a range of financial products and services to support Canadian farmers and business related to farming.
- Canada Small Business Financing Program
The Canada Small Business Financing Program (CSBFP) makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.
- Employment and Social Development Canada
The Work-Sharing Program helps employers and employees avoid layoffs, when there is a temporary decrease in the normal level of business activity that is beyond the control of the employer.
The Employment Insurance (EI) program provides temporary income support to unemployed workers while they look for employment or to upgrade their skills. Access to regular EI benefits automatically increases as regional unemployment rates rise.
Additional resources on expanding your business into new markets.
The government will closely monitor impacts across sectors and the economy, and will bring forward additional measures to support workers and businesses as needed.
The government is also taking steps to mitigate the impact of its tariff countermeasures on Canadian workers and businesses by establishing a remission process to consider requests for exceptional relief from the tariffs imposed as part of Canada’s immediate response, as well as any future tariff actions.
How can Canadians help?
Buying products made in Canada or choosing Canada in other ways, like taking advantage of the country’s exciting tourist destinations, is a great way to support Canadian entrepreneurs, Canadian workers, and communities.
When shopping, check products for “Made in Canada” or “Produced in Canada” labels, and consider buying them instead of other available products.
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