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Here's where Canada's effective U.S. tariff rate might stand amid carve outs

Darpan News Desk The Canadian Press, 12 Aug, 2025 09:16 AM

Amid the many layers of tariffs and exemptions from the United States, some economists say the effective tariff rate on Canada is much lower than the headline figures suggest.

RBC senior economist Claire Fan says the effective tariff rate is an average of the import duties paid on goods heading to the United States that accounts for exemptions tied to the Canada-U.S.-Mexico Agreement.

While U.S. President Donald Trump ramped up blanket tariffs on Canada to 35 per cent at the start of the month, that move maintained an exemption for goods compliant with that trade pact.

RBC estimates the effective tariff rate on Canadian goods is closer to six per cent today.

Fan warns that the effective tariff rate offers a simple explanation for the total level of U.S. tariffs facing Canada, but it can underestimate the severity of the trade disruption.

She says ongoing tariffs of 50 per cent on steel and aluminum, for example, will have an outsized impact on those sectors going forward.

Picture Courtesy: THE CANADIAN PRESS/Darryl Dyck

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