Canada: Canada Preparing To Impose Retaliatory Duties On U.S. Imports

Last Updated: June 19 2013
Article by Peter E. Kirby, Clifford Sosnow and Claudia Feldkamp

On Friday, June 7, 2013, Canada's Ministers of International Trade and of Agriculture and Agrifood, released a list of U.S. commodities that are being considered for possible retaliation in Canada's ongoing dispute with the United States over its country of origin labelling rules for beef and pork. In the past, retaliation has taken the form of a 100% surtax on specific imports, so the announcement is important to Canadian importers of U.S. goods and to U.S. exporters. The list, which is not final, is to allow the Canadian government to consult with industry on which U.S. commodities should be targeted for retaliation.

In December, 2012, following four years of litigation, a WTO arbitration panel ruled that the U.S. should bring its country of origin requirements into conformity with its WTO obligations by May 23, 2013. While the U.S. did implement changes to its rules, Canada considers that the revised requirements continue to violate WTO law. In fact, the Canadian Pork Council and the Canadian Cattlemen's Association have lambasted the latest U.S. changes as being even more discriminatory against Canadian exports.

Under WTO rules, Canada does not yet have the right to impose retaliatory tariffs, and likely won't have that right until sometime in 2014. Nevertheless, it has decided to move ahead with the process of choosing the goods that will be targeted for retaliation. If past practice is any guide, the final list will be chosen with a view to causing as little damage to Canadian interests as possible, while hurting those U.S. interests considered most vulnerable to pressure. The list of potential targets is set out below.

Canadian businesses that import goods from the United States should review the attached list and determine whether any of their U.S. origin imports could be affected.  If so, it is essential that such businesses make their concerns known to the Canadian government to avoid disruption to their businesses.  Similarly, American businesses that export products to Canada should also review the list and determine if their exports could be affected. If so, they should consider working with Canadian importers to make sure their exports are not disrupted.

If you have any questions regarding the foregoing or require assistance in formulating or coordinating any submissions to the Canadian government on this possible surtax, please do not hesitate to contact the members of the International Trade and Customs Law group.

Here is the list of U.S. goods that the Canadian government will consider for retaliation. The numbers indicate the tariff heading, sub-heading or item under the World Customs Organization's Harmonized Commodity Description and Coding System.

  • 01.02: live bovine animals;
  • 01.03: live swine;
  • 02.01: meat of bovine animals, fresh or chilled;
  • 02.02: meat of bovine animals, frozen;
  • 02.03: meat of swine, fresh, chilled or frozen;
  • 0207.13.10: cuts of offal, fresh or chilled, of spent fowl;
  • 0406.90: cheese, not including the following: fresh (unripened or uncured) cheese, whey cheese or curd; grated or powdered; processed cheese; blue-veined cheese or cheese containing veins produced by Penicillium roqueforti;
  • 0808.10: apples, fresh;
  • 0809.29: cherries, other than sour cherries (Prunus cerasus);
  • 0812.10: cherries, provisionally preserved (unsuitable in that state for immediate consumption);
  • 10.05: corn (maize);
  • 1006.30.00: semi-milled or wholly milled rice, whether or not polished or glazed;
  • 1602.32.11: prepared or preserved-prepared meals of spent fowl; prepared meals of specially defined mixtures;
  • 1602.32.92: prepared or preserved-specially defined mixtures, other than in cans or glass jars; spent fowl other than in cans or glass jars;
  • 1602.49: prepared or preserved swine cuts, other than ham and cuts thereof; other than shoulder and cuts thereof;
  • 1602.50: prepared or preserved meat of bovine animals;
  • 1702.20: maple sugar and maple syrup;
  • 1702.40.00: glucose and glucose syrup, containing in the dry state at least 20 percent but less than 50 percent by weight of fructose, excluding invert sugar;
  • 1702.60.00: certain fructose and fructose syrup, containing in the dry state more than 50 percent by weight of fructose, excluding invert sugar;
  • 1806.20: chocolate and other food preparations containing cocoa-preparations in blocks, slabs or bars weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg;
  • 1806.90: other chocolate and other food preparations containing cocoa-ice cream mix or ice milk mix; chocolates; chocolate coated nuts and other confectionery;
  • 19.02: pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagna, gnocchi, ravioli, cannelloni; couscous, whether or not prepared;
  • 19.04: prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes); cereals (other than maize [corn] in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included;
  • 19.05: bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products;
  • 2004.10.00: certain potatoes, prepared or preserved otherwise than by vinegar or acetic acid, frozen;
  • 2009.11: frozen orange juice;
  • 2103.20: tomato ketchup and other tomato sauces;
  • 22.04: wine of fresh grapes, including fortified wines; certain grape must;
  • 2207.20: ethyl alcohol and other spirits, denatured, of any strength;
  • 2940.00.00: certain sugars, chemically pure, other than sucrose, lactose, maltose, glucose and fructose; sugar ethers, sugar acetals and sugar esters, and their salts;
  • 3504.00: peptones and their derivatives; other protein substances and their derivatives, not elsewhere specified or included; hide powder, whether or not chromed;
  • 71.13: articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal;
  • 7306.40.00: certain tubes, pipes and hollow profiles, welded, of circular cross-section, of stainless steel;
  • 7321.90: parts for non-electric heating appliances;
  • 7326.11.00: grinding balls and similar articles for mills, forged or stamped, but not further worked, of iron or steel;
  • 9401.30: swivel seats with variable height adjustment;
  • 9403.30.00: wooden furniture of a kind used in offices; and
  • 9404.29.00: mattresses of materials other than cellular rubber or plastics, whether or not covered.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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