Ottawa: Canada’s finance minister says the government is keeping 25% retaliatory tariffs on tens of billions of US dollars in US goods, disputing a report from a research firm that suggested it had paused the vast majority of those levies.
Francois-Philippe Champagne said 70% of the counter-tariffs implemented by Canada in March are still in place, according to a social media post last Saturday. The government “temporarily and publicly paused tariffs” on some items for health and public safety reasons, he said.
The 70% figure implies that Canada continues to charge tariffs on about C$42bil or about US$30.1bil of US exports to Canada, excluding automobiles.
Champagne’s post is pushing back on a May 13 report from Oxford Economics.
The note from economists Tony Stillo and Michael Davenport said recent government exemptions to tariffs covered so many categories of products that the result was a “nearly zero” increase in Canada’s tariff rate against the United States.
After the report, opposition politicians accused Prime Minister Mark Carney of not being transparent about his tariff strategy.
Carney campaigned in the recent election as the best candidate to handle the trade war, and said numerous times the government’s counter-tariffs were designed to “cause maximum pain” in the United States. His Liberal Party won the April 28 vote.
US President Donald Trump has imposed tariffs against an array of Canadian and Mexican products – including cars and trucks – despite the trade deal that exists between the three countries.
Canada responded by first putting 25% counter-tariffs on a list of US-made consumer goods, steel and aluminium, then adding tariffs on US-made vehicles.
But on April 15, Champagne announced a series of short-term exemptions. Companies in Canada are allowed to import items used in manufacturing, processing and food and beverage packaging for six months, without paying the tariffs.
Items that are needed for public health, healthcare, public safety, and national security are also exempt during that time.
Automakers that manufacture in Canada, such as General Motors Co and Honda Motor Co, are allowed to bring in some vehicles tariff-free under a process called “performance-based remission”.
The strategy was intended to give the companies an incentive to keep their Canadian operations despite US tariffs. — Bloomberg
