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Apply for CanExport SMEs funding today
The CanExport SMEs program of Canada's Trade Commissioner Service is designed to encourage small and medium-sized enterprises (SMEs) to export Canadian goods and services to new international markets. Funding that helps your company grow into global markets
Trade Impact Program
The EDC Trade Impact Program will facilitate an additional $5 billion over two years in support for eligible companies across a range of products to help them navigate economic challenges.
The program aims to help in the following areas:
- Export confidently: EDC trade credit insurance protects against losses in the event of non-payment
from foreign or domestic buyers.
from foreign or domestic buyers.
- Manage currency fluctuations: We offer solutions that mitigate the risks associated with foreign
exchange fluctuations by stabilizing your costs and protecting your profit margins from adverse currency
movements.
exchange fluctuations by stabilizing your costs and protecting your profit margins from adverse currency
movements.
- Access more working capital: EDC guarantees share a portion of the financial institution's risk with us,
allowing companies to access more financing for managing cash flow challenges and growing your
operations.
allowing companies to access more financing for managing cash flow challenges and growing your
operations.
- Enable global expansion: EDC's financing solutions enable companies to increase their capacity for
trade, expand their footprint in different markets, or acquire a foreign company.
trade, expand their footprint in different markets, or acquire a foreign company.
As of March 11
1) U.S. tariff updates
Tariff exemptions for CUSMA compliant Canadian imports into the U.S. until April 2. President Trump announced on March 3 that the tariffs he threatened under the International Emergency Economic Powers Act (IEEPA), namely, 25% across-the-board tariffs & the 10% energy tariff, would enter into force on March 4 at 12:01 a.m. However, on March 6, President Trump signed an Executive Order that temporarily suspended these tariffs on Canadian goods that claim and qualify for CUSMA preference until April 2 (see the related Fact Sheet for more information). Notably, any tariffs that were collected from March 4-6 will not be refunded.
According to a White House official that briefed reporters, only 38% of imports from Canada used CUSMA preferences last year whereas 50% of imports by Mexico did. These figures reflect the fact that the Most Favoured Nation (MFN) tariffs via the WTO were 0% or relatively low at the time and there was therefore often not a need for Canadian exporters to utilize tariff preference under CUSMA to ship to the U.S. It is expected that there will now be a shift towards using the CUSMA preference to avoid the tariffs. Economists have come up with different numbers for how many goods the tariff suspension could affect. According to calculations by the Peterson Institute for International Economics, about 85% percent of U.S. merchandise imports from Canada and Mexico may be eligible for preferential tariffs under CUSMA.
Finance Canada is interpreting ‘CUSMA-compliant’ trade based on whether companies claim CUSMA preferential treatment when exporting goods to the U.S. (i.e. by completing the necessary trade documentation for CUSMA tariff rates) and whether they meet the CUSMA rules of origin provisions. Additionally, according to Finance Canada, transitioning from Most Favored Nation (MFN) status to CUSMA preference may not be overly burdensome for many companies, as they may already be complying with CUSMA's rules of origin requirements.
Other tariff exemptions and adjustments. In addition to the exemption for CUSMA compliant Canadian imports, the following temporary exemptions and adjustments to the IEEPA tariffs against Canada are now in place:
There is a lower 10% tariff on any potash imported from Canada and Mexico that falls outside the CUSMA preference.
On March 5, the White House announced that a 30 day tariff exemption would be granted for vehicles made in compliance with USMCA “so they are not at an economic disadvantage.”
On March 2, an Executive Order was issued that creates a temporary exception for goods eligible for duty-free de minimis treatment from Canada (e.g. shipments valued at less than $800). Per the Executive Order, this exemption will cease to be available once adequate systems have been put in place to collect tariff revenues.
Steel and aluminum tariffs (25%) to double – taking effect on March 12. On February 10, President Trump “restored” Section 232 tariffs on steel and aluminum that the U.S. had imposed in 2018, raising the aluminum tariff rate to 25% to match the steel tariff rate. According to the President, the tariffs will go into effect on March 12. On March 11, President Trump made post on Truth Social indicating that the tariffs against Canadian steel and aluminum would double to 50% in response to Ontario’s surcharge on electricity supplied to neighbouring states. The situation remains highly fluid, especially as the Canadian government is expected to respond to this escalation.
The U.S. Federal register notices for tariffs on steel and aluminum have been published. These include extended lists of targeted derivative products. Notably, the scope products covered is substantially larger than the scope of products covered in the steel and aluminum tariffs from 2018. Even if your exports were not impacted by U.S. tariffs in 2018, it is important to verify whether your businesses might be impacted by the latest tariffs by checking the tariff codes in the federal register notices. Many downstream products likely will be impacted (e.g. auto parts, furniture, gym equipment, etc.)
2) Canada’s retaliatory tariffs and other responsive measures
The federal government’s initial retaliatory measures to proceed. On March 4, the Canadian federal government confirmed that it is moving forward as expected with its plan for 25% tariffs on $155 billion worth of imported goods, beginning immediately with a list of goods worth $30 billion. The $30 billion list of tariffed goods is unchanged from the list that was announced on February 1 and will proceed as planned. The scope of the Canadian counter tariffs will be increased to $155 billion if the current U.S. tariffs are maintained. The larger list includes products such as electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks, and buses. Notably, Canada's tariffs only apply to goods originating from the U.S., which shall be considered as those goods eligible to be marked as a good of the U.S. in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. The government has also announced a remission framework to help importers who may need to seek transitional relief from tariffs. Additionally, the government is also considering non-tariff measures, potentially relating to North American security and energy security.
New federal supports for impacted businesses. On March 7, the federal government announced a new $6 billion support package to help businesses navigate U.S. tariff related disruptions. Notably these measures include temporarily relaxing rules around a program that allows employees to receive partial EI benefits while working reduced hours, updated Investment Canada Act Guidelines, and measures to ensure businesses have liquidity (e.g. Trade Impact Program through EDC, loans via BDC, and financing via Farm Credit Canada for Canadian ag and food industry).
Provincial non-tariff retaliatory measures. All provincial governments have announced non-tariff counter measures in response to the U.S. tariffs. Such measures include taking U.S. liquor off store shelves, restricting U.S.-based companies from taking part in government procurement, financial assistance for impacted businesses, and also implementing a 25% surcharge on electricity supplied to neighbouring states in the case of Ontario. You can view each individual province’s non-tariff measures below.
Ontario: Ontario rips up Starlink deal, plans to tax electricity in response to Trump trade war | CBC News
New Brunswick: Government shares provincial tariff action plan
Saskatchewan: Saskatchewan To Halt Us Alcohol And Procurement | News and Media | Government of Saskatchewan
Prince Edward Island: tariff_response_plan.pdf
Newfoundland and Labrador: Statement from the Premier in Response to U.S. Tariffs - News Releases
3) Finance Canada’s consultation on counter tariffs
Finance Canada has launched its 21-day consultation on the second phase of Canada’s tariff response (25% tariffs on $125 billion worth of imported goods). The consultation webpage can be viewed here.
The government is seeking views on the proposed tariff measures, including the scope of goods targeted by Canada’s second phase of counter tariffs. The list of potential goods that might be tariffed can be viewed here. Notably, this list of goods is cumulatively valued at approximately $200 billion, whereas the second phase of retaliatory tariffs is intended to only capture $125 billion worth of goods. This disparity has been acknowledged by Finance Cananda and points to the fact that there is presently flexibility regarding goods the government might remove from its counter tariff list.
Input on tariff measures should be provided by completing this form. If you wish to provide additional information not included in the form, as well as any additional views or comments you would like to provide on Canada's tariff response, you can also e-mail consultations@fin.gc.ca, and include "U.S. Tariff Consultations" in the subject line. While the notice period ends on April 2, the Government may need to respond to additional tariff threats from the United States before this date. Should the U.S. impose additional tariffs on Canada, the government would consider all options in response.
If you are planning to share your feedback on the counter tariffs through this consultation, please also share your feedback with us. Understanding your tariff concerns will help the Canadian Chamber ensure that our advocacy is aligned with your priorities.
Note: The $125 billion retaliatory tariff package is presently linked to the 25% and 10% IEEPA tariffs. If the section 232 tariffs on steel and aluminum take effect this week, the Canadian government will respond with a separate retaliatory package that may draw from the existing lists.
The Government of Canada is outlining a framework and process for how it will consider remission requests for the tariffs on products from the United States (U.S.) that appy beginning on March 4, 2025. Under specific circumstances, remission allows for relief from the payment of tariffs, or the refund of tariffs already paid.
The Government of Canada is now accepting submissions to a remissions process to provide tariff relief for businesses in the following cases:
"To address situations where goods used as inputs cannot be sourced domestically, either on a national or regional basis, or reasonably from non-U.S. sources.
To address, on a case-by-case basis, other exceptional circumstances that could have severe adverse impacts on the Canadian economy."
(March 4)
