The latest on the US and Canada tariffs

Relationships between the United States and its trading partners have become increasingly strained following the President unveiling “reciprocal” tariffs to be applied to most nations. While Canada was spared receiving a “reciprocal” tariff, our economy is still reeling from tariffs on steel and aluminum products, as well as on automobiles. Canada’s non-USMCA compliant exports to the US are also subject to 25% tariffs.

In response to the President’s actions, Prime Minister Carney announced retaliatory measures, including a 25% tax on US steel and aluminum products, and US-made vehicles, along with 25% tariffs on some 30 billion in US goods exported to Canada. Perhaps most worrying for our members is the banning by various Canadian jurisdictions of US-based companies from participating in public procurement, which will strain the delivery of projects.

Below is a summary of the tariffs presently in place against Canada, along with a statement on allowing US firms to participate in the Canadian procurement system.  

1. The IEEPA “Border & Fentanyl” Tariffs

25% tariffs added to all goods imported into the US from Canada; 10% tariffs will be added to energy products and potash.

• Scheduled for implementation on February 3; in force March 4-6; presently delayed indefinitely.



Canadian Response: March 4 - The Federal Government adds 25% tariffs on $30 billion of US imports.

• This includes power tools, orange juice, peanut butter, wine, spirits, beer, apparel, and coffee.
•  Additional 25% tariffs on $125 billion of US imports into Canada are paused.

Update: April 2 - USMCA-compliant goods (the majority of Canadian exports to the USA) are presently exempt from the IEEPA Tariffs.

2. The s.232 Steel and Aluminum Tariffs

March 12 - The United States reimposed Section 232 tariffs previously deployed in this first time. There is presently a 25% tariff on all steel and aluminum products entering the US, with Canada being traditionally being the largest exporter of both.

Canadian Response: March 13 - 25% tariffs on $15.5 billion of US steel and aluminum imports, product-for-product response

3. The s.232 Automobile Tariffs

April 3 - 25% tariff on imported automobiles and certain auto parts, including those

from Canada:



• The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmission powertrain parts, and electrical components), with potential to expand tariffs on additional parts if necessary.
• USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with U.S. Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-U.S. content.

Canadian Response: April 3 - 25% tariffs on the US components vehicles imported from the United States, even if compliant with USMCA, matching the US approach. Non-USMCA compliant vehicles made in the US are subject to a full 25% tariff, regardless of part composition. Unlike the US, the importation of vehicle parts is exempt from Canadian tariffs.

4. “Reciprocal” Tariffs

April 2 - The President has announced new tariffs to mirror the trade barriers faced by U.S. exporters, country by country. Levies range, but virtually all US trading partners received at least a 10% tariff on the importation of their goods into the US.



Canada and Mexico were spared from “Reciprocal” tariffs and are presently only subject to the above.

Bans and Restrictions of US Firms from Public Procurement

ACEC is concerned over the recent procurement bans imposed by various Canadian jurisdictions on U.S. based firms in response to American tariffs on Canadian goods. Currently, the US tariffs do not directly apply to engineering, architectural, and other professional services. However, broad or imprecise procurement bans may result in an escalation that broadens the trade war to include professional services – increasing the potential harm to entire sectors previously exempt from the US tariffs.

While we understand the intent to protect Canadian interests, such measures may inadvertently lead to project delays and increased costs, ultimately hindering the timely and efficient delivery of critical infrastructure projects.

While these actions are intended to support domestic businesses, they may reduce industry capacity, potentially leading to less competitive procurement processes and higher project costs and delays

ACEC advocates for a balanced approach that safeguards Canadian economic interests without compromising the efficiency and effectiveness of infrastructure development. Maintaining open and competitive procurement processes is vital for fostering innovation, ensuring value for taxpayers, and delivering high-quality infrastructure that meets the needs of Canadians.

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