After U.S. President Donald Trump boosted steel and aluminum tariffs to 50 per cent, some industry groups and the Official Opposition have called on the federal government to retaliate in kind.
Here's a look at the counter-tariffs Canada has imposed so far.
1. What do the counter-tariffs cover?
The Canadian government has imposed retaliatory tariffs on U.S. goods three times since Trump's trade war began, aimed at what it says are imports worth $95.4 billion worth.
On March 4 — after the U.S. imposed 25 per cent tariffs on all Canadian goods, along with 10 per cent on energy products — then-prime minister Justin Trudeau announced the first raft of counter-tariffs on $30 billion worth of U.S. goods.
Those 25 per cent tariffs target things like orange juice, motorcycles, clothing and shoes, coffee, cosmetics and alcohol.
On March 12, the U.S. added a 25 per cent tariff on all steel and aluminum products, which was stacked on top of existing levies on Canadian goods.
Canada's response a day later was 25 per cent reciprocal tariffs on another $29.8 billion of U.S. goods, including steel and aluminum, tools, computers and sport equipment.
On April 9, in response to another round of U.S. tariffs — this time targeting the Canadian auto industry — the federal government imposed 25 per cent duties on "non-CUSMA compliant vehicles" from the U.S. and 25 per cent tariffs on the content of CUSMA-compliant vehicles from the U.S.
The government says this covers $35.6 billion in auto imports from the United States.
2. What are the exemptions?
On April 15, in the midst of the federal election campaign, Prime Minister Mark Carney announced that the government was exempting some products from tariffs for six months to help Canadian businesses adapt.
The tariff holiday covers specific categories: goods used in Canadian manufacturing, processing and food and beverage packaging, as well as imports used to support public health, health care, public safety and national security objectives.
And when it comes to vehicle tariffs, the government said "companies that produce autos in Canada have been granted remission to ensure the ongoing viability of their Canadian operations," but that it is "contingent on them maintaining production levels in Canada and on following through with planned investments."
3. Does this mean all counter-tariffs have been dropped?
On Wednesday, Opposition House leader Andrew Scheer said the government "secretly dropped those tariffs to zero during the campaign."
This line has been repeated often by the Conservatives since the release of a report by Oxford Economics on May 13, which said Canada paused counter-tariffs for six months "on nearly all U.S. goods imports." The report said it estimated the exemptions would cover about 97 per cent of the tariffs.
The government said that's not true.
A spokesperson for Industry Minister Mélanie Joly said the exemptions apply to 30 per cent of the $60 billion worth of goods that are subject to tariffs — a figure that doesn't include the auto tariffs.
William Pellerin, a partner in international trade at McMillan LLP, said the exemption is not nearly as broad as what's been reported.
"I think that report caused a lot of consternation within the trading community and the legal community. It is absolutely, certainly not zero impact on our clients," he said, noting many of them are paying millions of dollars in duties already.
4. Where does all this leave Canadian businesses?
Pellerin said there's a lot of confusion out there about what's covered by the exemptions.
The Canada Border Services Agency has issued a customs notice explaining how to interpret the exemptions, "but in many circumstances it's simply not obvious at all," Pellerin said.
As an example, he said he has clients who have been told by the CBSA that imported agricultural equipment is not exempt.
"We actually think that that's legally incorrect, that they've poorly interpreted the order-in-council," he said.
That's the kind of thing his firm is trying to sort out while it waits and hopes for a long-term resolution.
"Whatever actions need to be taken to get back to a tariff-free world (are) absolutely necessary," he said.
5. How much tariff revenue has the government collected and where is it going?
Conservative MPs have been asking this question in the House of Commons all week.
On Tuesday, Conservative MP Dan Albas charged that "Liberals promised $20 billion in elbows-up U.S. tariffs, but later dropped them with no regard to affected Canadian workers or fiscal impacts."
Prime Minister Carney responded to say that tariffs are still in effect and $1.7 billion has been collected so far.
The federal government's latest fiscal monitor showed Canada collected an extra $617 million in import duties in March, as compared to the year before. Figures for April and May have not yet been published.
During the election campaign, the Liberals and the Conservatives both estimated Canada would collect $20 billion in tariff revenue this fiscal year.
In its election platform, the Liberal party pledged that "every dollar raised from these tariffs will support Canadian workers and businesses affected by the trade war."
Officials at the Finance Department said in a statement that the money is going into the consolidated revenue fund and being used "to support those hardest hit by this economic disruption."
The statement said that is happening through programs like employment insurance work-sharing, deferral of corporate income tax payments and GST/HST remittances, or by offering liquidity support through Export Development Canada, Farm Credit Canada, Business Development Canada and the Large Enterprise Tariff Loan Facility.
Picture Courtesy: AP Photo/Mark Schiefelbein
