• 3.7.25
• General

Tariff Damage Continues as U.S. Tariffs still Imposed on some Categories and Canada Retains Surtax on Cross-Border Shopping

While the White House partially reversed course on Thursday, postponing a 25% tariff on many Canadian goods until April 2,  two categories have gone forward and Canada has retained its retaliatory tariffs. It has also become clear that the U.S. delay is only on "USMCA compliant" goods with more than half of imports from Canada entering under other Most Favored Nation duty free status but not directly under USMCA. This technicality means the pause is not entirely as it first seemed, with a wide range of duty free MFN vs. official USMCA covered goods still being hit with the 25% tariff,  including things ranging from beverages to medical supplies and pharmaceuticals.

While many Canadian goods entering the U.S. have in the past elected not to be certified USMCA as they can export under another duty free or minimal duty status with far less complication, these exporters are now viewing a status change that may not be practical given other changes that may come on April 2.

"Yesterday's action also includes proceeding with a 10% U.S. tariff on energy and a 10% tariff on potash which New York farmers really depend on," notes Garry Douglas, President of the North Country Chamber of Commerce. "And because the U.S. has not truly suspended all of its tariffs, Canada has retained its retaliatory surtax of 25% on a wide range of American consumer goods. This means a virtual freeze on cross-border shopping by our Canadian friends who are now having to declare all such purchases and to pay both the new 25% surtax plus 13% duties upon returning at the border. That's 38% extra on top of the poor exchange rate. There's still an $800 exemption after being in the U.S. 48 hours but no exemption for day trippers."

Says Douglas, "This only further accents the chaos being created, the direct impact on our region of this trade war and the urgency of fully resolving this and returning to normalcy."

More details: Tariff war: Cross-border shoppers hit with 25% surtax on U.S. purchases when re-entering Canada