UPDATE: President Trump and Prime Minister Trudeau have paused tariffs for at least 30 days. Canada will implement its $1.3 Billion Border plan, make new commitments to appoint a Fentanyl Czar, list cartels as terrorists, ensure 24/7 "eyes on the border" and launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering. Prime Minister Trudeau has also signed a new intelligence directive on organized crime and fentanyl and will commit $200 million to this directive. Consequently, neither the United States' 25% tariff on Canada nor Canada's 25% surtax on the United States will go into effect for at least 30 days.
On February 1, 2025, President Trump imposed tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025.1 The tariffs are an additional 25% ad valorem rate of duty on imports from Canada and Mexico and 10% on imports from China. The tariffs will apply to all imports except Canadian energy resources exports, which will face a 10% tariff instead. Shortly after the US announcement, Canada announced retaliatory tariffs to be implemented in two waves of 25% tariffs on imports from the United States, amounting to $155 billion (CAD).2 Products in the first wave of tariffs will include live poultry, dairy produce, vegetables, coffee and tea, products from the milling industry, oil seeds, sugar, beverages, spirits and vinegar, tobacco, plastics, rubber, wood, paper, apparel and accessories, articles of iron and steel, aircraft parts and accessories, and arms and ammunition.3 Products in the second wave of tariffs are expected to include passenger vehicles and trucks (including electric vehicles), steel and aluminum products, aerospace products, beef and pork.4
The first wave of tariffs will be imposed on $30 billion (CAD) worth of US imports starting on February 4, 2025. Canada's Governor General in Council issued an order in council on February 2, 2025, to implement this wave of tariffs (United States Surtax Order (2025)).5 The order, which will enter into force on February 4, 2025, applies a 25% surtax on a detailed list of goods originating from the United States. Please see below for a summarized list. The second wave of 25% tariffs will be applied to an additional list of products from the United States, amounting to $125 billion (CAD).
In addition to these actions, Canada is considering non-tariff retaliatory measures, and some provinces have announced their own retaliatory measures against US tariffs.
NOTE: At the time of publication, President Trump had agreed to suspend 25% tariffs on imports from Mexico, following discussions with Mexico’s President Sheinbaum. President Trump also continued to discuss the matter with Canada’s Prime Minister Trudeau on February 3, although U.S. Customs and Border Protection proceeded to issue implementation guidance for the 25% tariff on imports from Canada (https://public-inspection.federalregister.gov/2025-02291.pdf).
First wave of tariffs (as of February 4, 2025)
- Tariff rate: As of February 4, 2025, goods that originate in the United States that are classified under the Harmonized Tariff Schedule (HTS) codes set out in the schedule to the order in council will be subject to a surtax in the amount of 25% of the value for duty determined in accordance with sections 47 to 55 of Canada's Customs Act. This order does not apply to goods that are in transit to Canada on February 4, 2025.6
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Products covered: Canada has published the full list of items based on HTS codes in a schedule to the order in council.7 These products include: live animals; meat and edible meat offal; dairy product, birds' eggs, natural honey; edible products of animal origin; edible vegetables and certain roots and tubers; edible fruit and nuts; coffee, tea and spices; cereals; products of the milling industry; oil seeds; gums, resins; sugars and sugar confectionary, cocoa and cocoa preparations; preparations of cereals, flour, starch or milk; beverages, spirits and vinegar; tobacco; salt; essential oils and resinoids; soap; albuminoidal substances; plastic products; rubber products; articles of leather; lumber; pulp of wood; paper and paperboard; apparel and clothing accessories; footwear; headgear; ceramic products; glass; articles of iron and steel; articles of base metal; nuclear reactors; boilers; machinery and mechanical appliances; aircraft, spacecraft, and parts thereof; arms and ammunition; furniture; toys; and other items.
Notably, beef and swine products appear to be excluded from the initial wave of tariffs, but are expected to be included in the second wave.8
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Legal Authority: The United States Surtax Order (2025) is made pursuant to subsection 53(2) and 79(a) of Canada's Customs Tariff.9 Subsection 53(2) permits the Governor in Council to carry out certain acts on the recommendation of the Minister of Finance and the Minister of Foreign Affairs, including subjecting imported goods to a surtax in response to acts, policies or practices of a government of a country that adversely affects, or leads directly or indirectly to adverse effects on, trade in goods or services of Canada. Subsection 79(2) stipulates that such orders of the Governor in Council, made pursuant to subsection 53(2), do not apply to goods that are in transit to Canada at the time the order comes into force.
On February 2, 2025, Canada Border Services Agency (CBSA) issued Customs Notice 25-03: United States Surtax Order (2025), which sets forth further details regarding the application and administration of the order in council, including origin rules and requirements, calculation of the surtax, and exceptions to the surtax.10
Canada is planning to establish a framework and process to consider requests for exceptional relief from these tariffs and any future tariff actions. Details will be announced in the coming days.
Second wave of tariffs
The specific list of products that will be subject to the second wave of tariffs, amounting to $125 billion (CAD), has not been released. However, Canada announced that it intends to include products such as passenger vehicles and trucks, including electrical vehicles; steel and aluminum products; certain fruits and vegetables; beef; pork; and dairy products.11 Canada also announced that it will publish a full list of the proposed goods to be subject to the second wave of tariffs and hold a 21-day public comment period before implementing the tariffs.
Non-tariff actions
In addition to the tariff measures, Canada has suggested that it will consider non-tariff options should the United States continue to apply the "unjustified tariffs on Canada." In particular, Prime Minister Trudeau suggested in his initial announcement that non-tariff measures may include restrictions on the export of critical minerals and energy products to the United States and prohibiting American companies from bidding on government contracts.12
Provincial actions
Several Canadian provinces have also announced their intention to apply province-specific retaliatory measures.
- Ontario has ordered the Liquor Control Board of Ontario (LCBO) to remove American products from its shelves immediately. The LCBO is the only wholesaler of alcohol in Ontario. The LCBO will also remove American products from its catalogue. This means restaurants and liquor retailers in Ontario will not be able to order or restock US products.13 Québec, Newfoundland and Labrador, and Manitoba have made similar announcements.14
- British Columbia has also directed the BC Liquor Distribution Branch to stop purchasing American liquor immediately from "red states" and remove top-selling brands from public liquor stores. In addition, British Columbia has directed government and Crown corporations to buy Canadian goods and services over American.15
- Nova Scotia is planning to direct the Nova Scotia Liquor Corporation to remove all US alcohol from its stores as of February 4, 2025. Nova Scotia will also seek to cancel existing contracts with Americans and maintain an option to reject bids on its contracts. The province will also double the cost of tolls on the Cobequid Pass highway for commercial vehicles from the United States, effective February 3, 2025.16
Possible US response
Businesses should anticipate that Canada's retaliation could escalate trade friction with the United States, as Trump's executive orders indicate that the United States may raise its tariffs further if the targeted countries (Canada, China, and Mexico) retaliate.
Dena Givari (Intenational Attorney, White & Case, Washington, DC) contributed to the development of this publication.
1 For more information, see our alert here: President Trump Imposes 25% Tariffs on Canada and Mexico, and 10% Tariffs on China | White & Case LLP.
2 Announcement from the Department of Finance Canada: "Canada announces $155B tariff package in response to unjustified U.S. tariffs."
3 Order in Council, 2025-0072.
4 Announcement from the Department of Finance Canada: "Canada announces $155B tariff package in response to unjustified U.S. tariffs."
5 Order in Council, 2025-0072.
6 Order in Council, 2025-0072.
7 List of products from the United States subject to 25 per cent tariffs effective February 4, 2025 - Canada.ca.
8 Announcement from the Department of Finance Canada: "Canada announces $155B tariff package in response to unjustified U.S. tariffs."
9 S.C. 1997, c. 36.
10 Customs Notice 25-03: United States Surtax Order (2025).
11 Announcement from the Department of Finance Canada: "Canada announces $155B tariff package in response to unjustified U.S. tariffs."
12 Tasker, John Paul, Trudeau hits back at the U.S. with big tariffs after Trump launches a trade war, CBC, February 1, 2025, https://www.cbc.ca/news/politics/trump-tariffs-canada-february-1-1.7447829.
13 CBC News, Doug Ford announces Ontario ban on American liquor in response to U.S. tariffs, February 2, 2025, https://www.cbc.ca/news/canada/toronto/ford-lcbo-tariffs-trump-1.7448423.
14 CBC News, Doug Ford announces Ontario ban on American liquor in response to U.S. tariffs, February 2, 2025, https://www.cbc.ca/news/canada/toronto/ford-lcbo-tariffs-trump-1.7448423.
15 British Columbia, Office of the Premier, Premier announces immediate response, vows to defend B.C. against Trump Tariffs, February 1, 2025, https://news.gov.bc.ca/releases/2025PREM0014-000077.
16 Nova Scotia, Premier's Office, Statement on American Tariffs, February 1, 2025, Statement on American Tariffs | Government of Nova Scotia News Releases.
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