The Canadian government has quietly eliminated more counter-tariffs on American products than initially disclosed, as per an order-in-council released online. This recent notice reveals that, apart from specific tariffs on steel, aluminum, and auto sectors, all retaliatory tariffs against the U.S. have been lifted, contrary to what Prime Minister Mark Carney had previously stated.
Initially, Carney had pledged to remove counter-tariffs on U.S. goods covered under the Canada-U.S.-Mexico Agreement (CUSMA) in August to align with President Donald Trump’s 35% tariffs on non-CUSMA compliant Canadian merchandise. However, the official government order-in-council indicates that even non-compliant products crossing the border are not subject to counter-tariffs, deviating from the reciprocal policy portrayed by federal authorities.
William Pellerin, an international trade lawyer, noted that the government’s announcement seemed aimed at mirroring U.S. actions towards Canada for political reasons. The announcement was made on August 22, with the official notice being published on August 29, but the exact timing of the policy shift remains unclear as the finance minister’s office declined to provide details.
While the potential revenue from counter-tariffs on non-CUSMA-compliant goods is uncertain, Pellerin suggested it would likely be minimal and insufficient to cover the additional expenses of enforcing these tariffs through the Canada Border Services Agency. Many goods crossing the border have the potential to become CUSMA compliant, but achieving this status involves meeting specific criteria and paperwork requirements, which some trade experts find burdensome and costly.
According to Pellerin, the decision to forego non-sectoral counter-tariffs reflects a strategic move to reduce compliance efforts and enforcement costs significantly. The government’s focus on advancing trade negotiations with the U.S. has been emphasized by Finance Minister François-Philippe Champagne’s spokesperson, John Fragos. This approach has faced criticism from Conservative Leader Pierre Poilievre, who accuses the prime minister of conceding too much to the U.S. without receiving equivalent benefits, light-heartedly referencing Carney’s slogan about assertiveness.
