Tariffs

A historical look at Trump's penchant for tariffs

From the archives: The more things change, the more they stay the same, as this 2018 expose from CPA Canada on Trump's first foray with tariffs proves.

The latest south of the border tariff drama is nothing new, in fact, it echoes Trump's first term in office. Back in 2018 CPA Canada delved into how we can counter tariffs, and though the times have changed a lot of this advice remains valuable. Stay tuned for more from our chief economist on this current threat, and March's edition of Pivot where we dive even deeper.

Learn more: A historical look at Trump's penchant for tariffs

Evaluating the potential impacts of US tariffs

The new US administration is considering sweeping tariffs on imports. While many important elements are unknown, these measures could be highly disruptive to the Canadian and US economies.

US President Donald Trump has said his government would impose tariffs of 25% on goods from Canada and Mexico. He has also threatened tariffs on goods imported from other countries. This could lead to countermeasures by the United States’ trading partners, including retaliatory tariffs.

Tariffs are taxes on imports that increase the price consumers and businesses pay for goods and services.1 Tariffs affect spending, trade flows, government revenue, exchange rates, employment, gross domestic product (GDP) and inflation. They could substantially disrupt supply chains in Canada, the United States and elsewhere around the world.

Read more: Evaluating the potential impacts of US tariffs

Tariffs: Roadmap for navigating trade uncertainty

Understanding the context is imperative to secure Canada’s trade future.

With its threat to impose hefty tariffs across the board on Canada, and the recent move to tax steel and aluminum at 25 per cent, the U.S. has introduced a historic level of uncertainty in the trade landscape between our two countries. The proposed 25 per cent levy on goods and 10 per cent on energy products, and Canada’s retaliatory move to tax $155 billion worth of U.S. goods, has escalated tensions to levels not seen in decades.

As this story continues to unfold, Canadian businesses, industries and CPAs must prepare for potential disruptions and shifting trade dynamics.

Learn more: Tariffs: Roadmap for navigating trade uncertainty

How new tariffs could affect Canadian businesses

Despite the previous agreement to delay any tariffs for at least 30 days, President Donald Trump signed orders on February 10 imposing 25% tariffs on all steel and aluminum imports—including imports from Canada—to take effect on March 12, 2025. He will also impose a new North American requirement for steel to be “melted and poured” and aluminum “smelted and cast” within the region to limit imports of Chinese steel.

Similar to what was done in 2017 when Trump had imposed a 25% tariff on steel and a 10% tariff on aluminum, the current round of proposed tariffs will be imposed under Section 232 of the Trade Expansion Act of 1962, which gives the president the authority to restrict trade on the grounds of national security. In his first term, President Trump placed tariffs on Canadian steel and aluminum for a year under this Act.

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Tax Insights: Potential US tariffs and Canadian countermeasures ─ How will it affect Canadian businesses?

What happened? On February 1, 2025, United States (US) President Donald Trump signed three executive orders that impose tariffs on imported goods, effective February 4, 2025, from:

• Canada – a 25% tariff, except that energy products will be subject to a 10% tariff
• Mexico – a 25% tariff
• China – an additional 10% tariff on top of existing tariffs

However, on February 3, 2025, the US agreed to delay implementing these tariffs on Canadian and Mexican imports for 30 days to allow for further negotiations with Canada and Mexico on enhancing border security, among other issues. If Canada and the US cannot reach an agreement, the US could potentially start applying tariffs based on the executive order on Canadian-origin goods imported into the US in the near future. The executive order that applies to China remains in effect.

Read more: Tax Insights: Potential US tariffs and Canadian countermeasures ─ How will it affect Canadian businesses?

Trump’s Tariff Turmoil – Insights from CPAs

As the Trump administration's sweeping tariffs create waves in the economic landscape, the role of Chartered Professional Accountants (CPAs) is more pivotal than ever. CPAs are essential in helping businesses navigate the complex and rapidly changing trade environment. CPA Ontario will continue to bring strategic insights to members to help them navigate the challenges ahead.

What a whirlwind this past week has been. Let’s get caught up and then dive into the perspective of three expert CPAs on the evolving tariff threats.

What Happened and How We Got Here

 On February 1, 2025, the Trump administration shook the economic landscape by announcing a set of sweeping tariffs through an Executive Order set to take effect on February 4, 2025. The mandate included a hefty 25% tariff on most Canadian imports, a similar 25% on Mexican imports, and an additional 10% tariff on imports from China. Energy resources from Canada, including oil, gas, and electricity, were not spared, but faced a lower tariff rate of 10%. As motivation, Trump cited a national emergency related to illegal immigration and drug trafficking across borders.

Read more: Trump’s Tariff Turmoil – Insights from CPAs

What does the future hold for the Canadian economy?

Shifting US policy impacts Canadian businesses in all sectors. Leaders should monitor changes to stay agile and responsive. Stay current, gain insight, and watch the webcast in the link below.

Watch: What does the future hold for the Canadian economy?