OTTAWA — From makeup to smartphones to kitchen appliances, the federal government is laying out its plan to hit the U.S. with dollar-for-dollar counter-tariffs that will impact around 700 different American products, while also announcing supports for Canadian workers and businesses, such as temporary changes to employment insurance.
The tariffs will be imposed on $27.6 billion worth of U.S. imports with tariffs varying from 15, 25 and 50 per cent depending on the product. The levies will be effective starting Sept. 8.
The list does not include any energy-related countermeasures.
Finance Minister François-Philippe Champagne, Industry Minister Mélanie Joly, Jobs and Families Minister Patty Hajdu and the Minister responsible for the Federal Development Agency for Southern Ontario Evan Solomon made the announcement in Ottawa on Tuesday.
After weeks of intense talks, Canada and the U.S. failed to strike a last-minute trade deal late Friday, leading to U.S. President Donald Trump’s new slate of 50 per cent tariffs on billions of dollars worth of Canadian goods to come into effect. The affected items even include those covered under the Canada-U.S.-Mexico Agreement (CUSMA).
The Trump administration says it is imposing new tariffs under Section 338 of the Tariff Act of 1930 over what Americans are describing as “discriminatory” trade policies, including the provincial ban on U.S. alcohol.
Speaking to reporters on Monday, Prime Minister Mark Carney called the United States’ latest offer on the table a “bad deal,” and said Canada “could not accept what the U.S. had offered, nor could we give what they had asked.”
And, in announcing Canada’s countermeasure plan on Tuesday, Champagne said the U.S. deal would have “harmed our workers,” “weakened our industries,” and “compromised principles fundamental to our nation.”
“Ultimately, the terms proposed by the U.S. administration were uneconomic, unfair, and ultimately unacceptable,” Champagne said. “They asked too much of Canada and offered too little.”
Which U.S. imports will be tariffed?
On Tuesday, government officials told reporters that the list of tariffed items were designed to match the U.S. levies on Canadian products, with “individual product rates based on matching the U.S. rate for the same goods.”
For example, tariffs on steel and aluminum imports from the U.S. will now go from 25 to 50 per cent, as will tariffs on furniture and clothing.
Other notable items being tariffed at 50 per cent include:
- Perfumes and makeup
- Smartphones
- Milk products
- Tableware and kitchenware
- Plywood products
- Paper products
- Honey, molasses and malt extract
- Doors, windows and frames
- Cutlery
The list of products being hit with 25 per cent tariffs include:
- A variety of seafood products
- Large kitchen appliances
- Cheese and curd products
- Carpets and textiles
Air conditioning machines, meanwhile, are among the shorter list of products being slapped with a 15 per cent tariff.
Asked by reporters if the tariffed products are targeting specific U.S. states, government officials speaking on background ahead of the announcement said the list came from consultation with stakeholders with the “primary objective” of protecting the “domestic market share for Canadian companies.”
The officials also insisted that the “objective is not to raise revenue,” but to protect the Canadian market.
And, asked about the estimated cost of retaliatory tariffs to Canadian consumers and businesses, officials didn’t give a specific number, saying only the intention was to develop a list that would mitigate negative impacts.
Joly, meanwhile, told reporters at Tuesday’s announcement that Canada’s measures are designed to target specific states.
“We’re also targeting products that will target states in the U.S.,” she said. “And so we’re being wise and strategic to put political pressure, and that’s why we think it’s the right thing to do right now, and that’s why I think (Champagne’s) approach is just the perfect one.”
During a question-and-answer period following Tuesday’s announcement, when asked why Canada’s countermeasures do not include retaliatory tariffs on energy or potash, which are vital to the U.S., Champagne said the goal is a “strategic” and “proportionate” response.
He added it’s about “levelling the playing field” for Canadian businesses by providing support in concert with counter-tariffs.
Support package includes EI changes, new loan opportunities
The ministers on Tuesday also laid out a new $7.5-billion support package for Canadian workers hit hardest by the latest round of tariffs including:
- Temporary employment insurance (EI) eligibility changes so affected workers can access $3.5 billion in additional available funding;
- An additional $1.5-billion investment through the Regional Tariff Response Initiative;
- A new $500-million liquidity stream under the Business Development Bank of Canada’s Pivot to Grow program;
- Expanded eligibility requirements to access Business Development Bank of Canada’s tariff-related programs;
- $2 billion for the Canada Strong Diversification Fund;
- And changes to the Large Enterprise Tariff Loan facility.
According to a release by the federal government Tuesday morning, changes to the new funding to the Regional Tariff Response Initiative include changing the cap on non-repayable contributions, from $1 million to $3 million. And, it’s upping available liquidity support to $2 million.
The federal government is also extending some of its previously announced temporary EI measures, including to waive the one-week waiting period, and to provide an extra 20 weeks of benefits for long-tenured workers.
It is also introducing a new temporary EI measure to allow people who have voluntarily left their job to access EI under certain conditions, so they can find new opportunities.
“That is the challenge, is (U.S. tariffs) can freeze our economy, it can freeze the ambition of our businesses, and it can freeze the autonomy of our individual Canadians,” Hajdu said during Tuesday’s announcement. “And that’s why we’re here today, because we’re going to make sure that doesn’t happen.”
Support ‘alphabet soup’: CFIB
In a statement Tuesday, Canadian Federation of Independent (CFIB) Business president and CEO Dan Kelly said while he “appreciates” the federal government’s attempts to deliver support and move quickly, the newly announced package appears to be “the usual alphabet soup of complicated programs.”
“They will be challenging for small business owners to figure out, let alone use,” Kelly wrote, adding it’s an added obstacle for businesses to deal with “a patchwork of agencies” as opposed to streamlining through the Canada Revenue Agency.
The CFIB is calling on the federal government to cut the small business tax rate and extend its suspension of the federal excise tax on fuel.
The Canadian Chamber of Commerce issued a similar statement, saying navigating the support package could add to business owners’ stress.
“We understand the government’s urgency to deliver rapid, agile and simple relief measures, which is why we cannot let red tape get in the way of being effective,” Canadian Chamber of Commerce President and CEO Candace Laing wrote in the statement.
“We want to give business urgent relief and breathing space at this time, while they work to figure out the path ahead,” Laing added. “So, we see that the intention of loans are helpful, but they can also be a monkey on the back when they come due.”
In response to that criticism and whether more federal help is on the table, should it be required, Champagne’s press secretary John Fragos said the government will “work with our industry partners to adjust programs to meet their exact needs all while remaining engaged with chambers across the country to ensure programs are responding to what Canadian workers and businesses need, while helping our economy adapt, diversify and grow.”
Poilievre, Carney discuss countermeasures
In a post to social media on Tuesday, Conservative Leader Pierre Poilievre said he spoke with the prime minister earlier in the day.
The Opposition leader is calling on Carney to recall Parliament in light of the escalating trade war and release the text of the rejected trade agreement.
Asked about the possibility of recalling MPs to Ottawa, Champagne said the federal government is doing what it was elected to do by supporting industries and workers, and wouldn’t directly answer whether Parliament will start its fall sitting early.
Parliament is currently set to return Sept. 21.
