People Mentioned
Partner, Competition, Trade and Foreign Investment, Toronto
On March 6, U.S. President Trump backtracked again on his promised 25% tariffs on Canada and Mexico, signing an executive order that temporarily removed the tariffs he imposed just two days earlier. The order applies to Canadian goods that are compliant with the United States-Mexico-Canada Agreement (USMCA), covering a large portion of Canadian exports to the U.S., and reduces the tariff on potash from 25% to 10%, the same lower rate applied to Canadian energy and critical minerals.
About 40% of Canadian exports are formally compliant with the USMCA, but many others face very low tariff rates under so-called “most-favoured nation” (MFN) rules.
“As a general statement, where the MFN rates are zero or very low, there are many goods that could otherwise be USMCA compliant, that aren’t making those claims because the juice isn’t worth the squeeze,” Jesse Goldman, a partner in Osler’s International Trade and Investment group, tells The Globe and Mail.
Many companies dealing in these goods can become compliant with USMCA rules — and thus eligible for the one-month reprieve — simply by filling out certain paperwork and confirming the origin country of their inputs. Those who rely on inputs from other countries, though, will have more difficulty.
“It’s that in-between zone where there’s a risk for Canadian business. If you can’t meet the USMCA [origin] rules, but for the 25% tariff you consider it a Canadian good, then you’ve got a problem,” Jesse says.
You can read the full article, “What gets a reprieve from Trump’s tariffs? Understanding the USMCA,” on The Globe and Mail website.
People Mentioned
Partner, Competition, Trade and Foreign Investment, Toronto
