On Thursday 12 December, we hosted the webinar “Trump and Tariffs: A Global Perspective of What Lies Ahead”. The session focused on the potential tariff impacts of President-Elect Trump’s second term in office, giving a global perspective on what to look out for, and how best to prepare.
Speakers from across the globe discussed the potential impacts in their respective jurisdictions, the key takeaways of which can be found here.
Highlights from our Canadian speaker Julia Webster are set out below, and can be heard here. To listen to the full webinar, please click here.
Highlights from Canada
President-Elect Trump has announced via the social media platform Truth Social that he intends to impose a 25% tariff on imports from Canada and Mexico when he takes office on 20 January 2025, citing illegal immigration and drug smuggling as key drivers of the tariff (see the post here). Key developments to be aware of include:
- Implementation of countermeasures are expected, including tariffs on specified U.S.-origin goods: Canada is making efforts to address some of the issues cited by President-Elect Trump, and the precise content of the countermeasures is unknown.
- Countermeasures will be proportionate to the value of U.S.-Canada trade impacted by the U.S. tariffs: Looking to Canada’s reaction to tariffs imposed during President-Elect Trump’s first term, we can expect to see the imposition of strategic tariffs by Canada. Canada previously imposed tariffs on consumer goods that are mass manufactured in Republican strongholds controlled by key allies of President-Elect Trump.
- Consultation with the Canadian public prior to implementation: For measures of this type and scale the Canadian government typically undertake a short public consultation of an expected 10 days to 2 weeks.
- Implementation of a remission process: It is expected that a remission processwill be implemented to allow imports to get tariff relief on certain goods, although it may take weeks to months to establish. There will likely be requirements to demonstrate why a particular good has to be sourced from a US provider subject to tariffs, and the economic impact if duty relief is not provided.
- Knock-on effects may indirectly impact other sectors of the Canadian economy: During President-Elect Trump’s previous term, Canada initiated safeguarding enquiries triggered by the diversion of goods otherwise destined for the US market. We may see similar trade defense mechanisms from Canada going forward.
Mitigation measures
Businesses whose supply chains may be affected by the imposition of these tariffs should consider intervention at an early stage, which may include setting up meetings with the Department of Finance in Canada. Businesses should also consider the financial impact of an increase of duty and the Canadian federal tax payments.
Most importantly, businesses should closely monitor developments and changes to offset any impacts of volatility once Trump takes office. For further information, and keep up to date on all developments, please see the Import and Trade Remedies blog.