Overview of U.S. tariffs
President Trump is pausing 25% tariffs on some Canadian goods until April 2. Starting March 7th, goods that are compliant under the Canada-U.S.-Mexico Free Trade Agreement (CUSMA) will be exempt from tariffs. What is considered CUSMA-compliant?
Potash, a key fertilizer for U.S. farmers, is now exempt from tariffs, meanwhile energy continues to be subject to a lower 10% tariff. 25% tariffs on steel and aluminum imports are in effect as of March 12.
Canada will keep the 25% tariffs on $30 billion worth of American goods but has agreed to postpone its second round of retaliatory tariffs, affecting an additional $125 billion in American products, until April 2. However, in response to the U.S. imposing 25% tariffs on Canadian steel and aluminum, Canada will introduce new tariffs on an additional $29.8 billion worth of American goods, scheduled for March 13.
In addition to regular meetings with federal and provincial officials across Canada, we are engaging with U.S. trade representatives to emphasize the importance of free trade between Canada and the U.S.
We’re committed to putting your voice front and center in all trade-related discussions. Tell us how U.S. tariffs are impacting your business – your input is crucial in shaping our advocacy efforts.
Supporting local businesses has never been more important.
Help CFIB fight against American tariffs and download your free “Proudly Canadian Owned” Point of Sale (POS) poster today!
What has Canada done to strengthen the border?
Canada has invested over $1 billion in new equipment and security measures to combat drug trafficking and illegal immigration, which aims to address U.S. concerns and avoid Trump’s tariffs. Specifically, Canada has increased investment in technology (such as, new drones and helicopters), increased personnel, and enhanced intelligence sharing. The government has also introduced new policies and programs to improve security and efficiency. Despite these investments and efforts, Trump is proceeding with tariffs, stating that Canada hasn't done enough.
See here for more detail on Canada’s Border Plan.
How much of U.S. drug and immigration issues are linked to Canada?
According to U.S. and Canadian government data:
- Less than 1% of fentanyl entering the U.S. comes from Canada.
- Over the past two years, about 6% of illegal immigrants at the U.S. border were stopped at our border.
If my business exports goods to Mexico, but they are shipped through the U.S., will they be impacted by tariffs?
No. Goods that are simply transiting through the U.S. on their way to Mexico should not be impacted by tariffs. As long as the goods do not undergo any changes or enter U.S. commerce, they are not subject to the U.S. tariffs. However, if the goods are processed or enter the U.S. market before continuing to Mexico, they may be subject to the applicable tariffs.
How can federal and provincial governments ease financial pressures on SMEs?
Canadian governments need a unified and proactive response to minimize harm to businesses and the economy. Governments must focus on reducing the tax burden, cutting red tape, addressing internal trade barriers, and strengthening border measures to help small businesses stay competitive.
Is my business eligible for the Work-Sharing program?
Work-Sharing is an agreement between employers, employees and the Government of Canada (Service Canada). The Work-Sharing Program helps employers and employees avoid layoffs, when there is a temporary decrease in the normal level of business activity that is beyond the control of the employer.
The Government of Canada has introduced special measures to better support employers and their employees in the wake of U.S. tariffs threats. These special measures, including expanded employer and employee eligibility, are in effect from March 7, 2025, until March 6, 2026.
Eligibility has been expanded:
- to businesses that have been in operation in Canada for 1 year
- to include non-profit and charitable organizations experiencing a reduction in revenue levels as a direct or indirect result of the tariffs
- to include cyclical or seasonal employers
- to employers experiencing a decrease in work activity over the past six months of less than 10% and allowing utilization of Work-Sharing to exceed 60%
- to employees who are not year-round, permanent, full-time or part-time employees, specifically seasonal or cyclical employees
- to employees assisting the employer recovery efforts
For more on the Work Sharing program, please visit this webpage.
Where are Canada’s other Free Trade Agreements (FTAs)?
Canada has 15 free trade agreements (FTAs) covering 51 countries1. These agreements provide Canadian businesses with preferential market access, reduced tariffs, and stronger trade rules. Here’s an overview of some of Canada’s key FTAs:
