New US tariffs, exemptions take effect on Canadian goods

On Tuesday, the United States implemented new tariffs on Canadian goods, impacting a diverse range of products while simultaneously exempting certain items. Cheese and motorboats joined the list of affected items, following an initial addition of toilet paper, fishing rod parts, and cement. The new duties, which apply to goods under the US-Mexico-Canada free trade agreement, come amid high living costs and as households and businesses prepare for the US midterm elections.

Senior US officials stated that the new tariffs affect only a small fraction of the overall bilateral trade. The amendments update the mix of Canadian products impacted by 50% US duties, with various cheeses, motorboats, papers, and aluminium and steel products added. Mattresses and specific types of furniture were also included.

Conversely, toilet and facial tissues, fishing gear, and whiskies in containers exceeding four litres were exempted, as were road salts needed for winter weather in certain states and cement crucial for construction projects.

The tariffs mark the latest escalation in the ongoing trade war between the North American neighbors. In August, President Donald Trump imposed a 50% tariff on US$20 billion worth of Canadian imports after trade talks failed. Canada retaliated by imposing counter-tariffs on a similar value of goods. The White House responded by announcing a ban on some alcoholic beverages and dairy products, effective September 29, while making changes to its tariff list.

A senior official revealed that Trump's earlier threat to increase tariffs on Canadian autos from 25% to 50% in January remains in effect.