Application of customs duties

For the moment, however, U.S. tariffs are a reality, and the companies present had many questions about their application. Without explaining the details of their mechanics, the Minister insisted on the importance, for Canadian companies, of taking steps to export under the Canada-United States-Mexico Free Trade Agreement (CUSMA). These products are exempt from 25% customs duties until April 2.

“I think Donald Trump's Commerce Secretary's strategy is to keep the exemption for products exported under CUSMA, but increase tariffs for the rest, and for every country in the world,” said Mélanie Joly.

But, she didn't deny the uncertainty, adding that in the end, “there's one person who decides, and that's Trump.”

A number of questions also concerned the American products on which Canada is imposing tariffs. For those scheduled to come into effect on April 2, the Minister mentioned that consultations are underway to determine what will be included.

For those taxed since March 5 and March 13, companies can file for duty refunds in certain cases, for example if they cannot source from outside the US.

“We don't want tariffs on American products to increase inflation in Canada,” said Mélanie Joly.

Developing new business relationships

During the meeting, several company representatives also expressed the need to develop markets other than the United States.

Mélanie Joly mentioned that Canada is already working to remove interprovincial tariff barriers, and that Canada has free trade agreements with all G7 countries, with the European Union and with several other countries.

The problem is that companies aren't necessarily aware of this, and there aren't that many trade missions organized in these countries,” she says. "We need to develop business networks in these countries, and I think we're currently realizing the importance of reducing dependence on the U.S.”

Government assistance

Questions were also asked about the Canadian government's $5 billion program to help exporting companies face current economic challenges.

“The directive has been sent to Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) to provide access to more liquidity and ease borrowing conditions,” says Mélanie Joly.

She also pointed out that employment insurance conditions have been broadened to avoid layoffs.

“For sure, there will also be some sector-specific assistance, but we shouldn't expect to see the government spend as much as it did during COVID-19,” she said, noting that the government's game plan for the economy will certainly be the issue at the ballot box in the next election.