Canada: The Maple Leaf Strikes Back: Canada Announces Retaliatory Tariffs On US Products

On May 31, 2018, the United States announced that it is imposing tariffs on the import of certain steel and aluminum products from Canada, at rates of 25% and 10% respectively, under section 232 of the Trade Expansion Act of 1962. Using the power granted by this section, the Trump Administration is basing its tariff action on a finding that Canadian imports of steel and aluminum are threatening to impair the national security of the United States.

The move threatens to ignite a trade war between the United States and Canada (as well as the European Union, Mexico and others who have also been targeted). As noted by Canada's Prime Minister Justin Trudeau, this is a "turning point in the Canada-US relationship". More broadly, the questionable reliance on national security threatens the integrity of the world trading order as governed by the agreements of the World Trade Organization, NAFTA and other trade deals. These implications are addressed in our earlier client alert U.S. Announcement of Massive Tariffs on Steel and Aluminum.

As with most trade wars, importers and exporters will be caught in the cross-fire. Upon receiving the news from the United States, Canada immediately announced that it will be imposing proportionate retaliatory tariffs on imports of certain US products.

Targeted Products

The retaliatory tariffs are designed to be so-called "dollar for dollar" tariffs – that is, they are intended to levy a similar amount of duty on US products to balance the duties imposed on Canadian steel and aluminum. Given the extensive steel and aluminum trade between the countries, and given that Canada is the largest supplier of steel and aluminum to the United States, these retaliatory measures will be amongst the highest ever imposed – totaling approximately $16.6 billion.

The current proposed plan is to levy the retaliatory tariffs on two groups of goods identified by their Harmonized System tariff classification. The first is primarily comprised of steel products set out in Table 1 below. These products will be subject to 25% duties. The second group of goods, found in Table 2 below, contains a potpourri of mostly consumer and retail products ranging from yogourt to dishwasher detergent to motorboats. These Table 2 goods are subject to 10% duties. The list has reportedly been designed by Canadian officials to exert the maximum amount of pressure on the Trump Administration by targeting products from swing states in the upcoming US midterm elections and key Republican congressional districts.

There are several important points to bear in mind when considering the proposed retaliatory tariffs:

  1. They will apply on goods that originate in the United States. Canada will assess this on the basis of the Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations. If the goods are eligible to marked as US origin, the duty will apply.
  2. They will take effect July 1, 2018. However, the retaliatory tariffs will only apply to goods shipped on or after that date – goods that are in transit on July 1, 2018 will not be subject to the Retaliatory Tariffs.
  3. They will remain in force until the United States eliminates its illegal tariffs on Canadian steel and aluminum.

Importer and Exporter Submissions on Proposed Retaliation

Companies should now be closely reviewing their existing supply chains and distribution channels to determine the impact of the US measures and Canada's proposed retaliation. They should be considering competitive impacts and strategies for alternative sourcing or markets for their products.

It should also be noted that retaliatory tariffs on these products are proposed and not final. The Department of Finance is accepting written submissions up until June 15, 2018. This provides companies doing business on either side of the border with an important opportunity to have input on the proposed retaliatory tariffs, either to revise, remove or add products proposed for retaliation. The International Trade and Investment Law Group at McCarthy Tétrault has extensive experience working the Ministry of Finance with regards to these matters and can assist to ensure any submissions have maximum impact. We can also assist in restructuring supply chains and helping companies cope with the new measures as they come into force.

***

Table 1

Tariff heading, subheading or item*

Description**

72.06

Iron and non-alloy steel in ingots or other primary forms (excluding iron of heading 72.03)

72.07

Semi-finished products of iron or non-alloy steel

72.08

Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated

72.09

Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated

72.10

Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, clad, plated or coated

72.11

Flat-rolled products of iron or non-alloy steel, of a width of less than 600 mm, not clad, plated or coated

72.12

Flat-rolled products of iron or non-alloy steel, of a width of less than 600 mm, clad, plated or coated

72.13

Bars and rods, hot-rolled, in irregularly wound coils, of iron or non-alloy steel

72.14

Bars and rods of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but including those twisted after rolling.

72.15

Other bars and rods of iron or non-alloy steel

72.17

Wire of iron or non-alloy steel

72.18

Stainless steel in ingots or other primary forms; semi-finished products of stainless steel

72.19

Flat-rolled products of stainless steel, of a width of 600 mm or more

72.20

Flat-rolled products of stainless steel, of a width of less than 600 mm

72.21

Bars and rods, hot-rolled, in irregularly wound coils, of stainless steel

72.22

Other bars and rods of stainless steel; angles, shapes and sections of stainless steel

72.23

Wire of stainless steel

72.24

Other alloy steel in ingots or other primary forms; semi-finished products of other alloy steel

72.25

Flat-rolled products of other alloy steel, of a width of 600 mm or more

72.26

Flat-rolled products of other alloy steel, of a width of less than 600 mm

72.27

Bars and rods, hot-rolled, in irregularly wound coils, of other alloy steel

72.28

Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel

72.29

Wire of other alloy steel.

7216.10

U, I or H sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of less than 80 mm

7216.21

L sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of less than 80 mm

7216.22

T sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of less than 80 mm

7216.50

Other angles, shapes and sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded

7216.99

Other angles, shapes and sections, of iron or non-alloy steel

73.05

Other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross-sections, the external diameter of which exceeds 406.4 mm, of iron or steel

73.06

Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel

7301.10

Sheet piling of iron or steel, whether or not drilled, punched or made from assembled elements

7302.40

Railway or tramway track construction material of iron or steel: Fish-plates and sole plates

7302.90

Other railway or tramway track construction material of iron or steel

7304.11

Line pipe of a kind used for oil or gas pipelines: Of stainless steel

7304.19

Line pipe of a kind used for oil or gas pipelines: Other

7304.24

Casing or tubing, of a kind used in drilling for oil or gas: Of stainless steel

7304.29

Other casing or tubing, of a kind used in drilling for oil or gas

7304.31

Tubes and pipes, of circular cross-section, of iron or non-alloy steel: Cold-drawn or cold-rolled (cold-reduced)

7304.39

Other tubes and pipes, of circular cross-section, of iron or non-alloy steel

7304.41

Tubes and pipes, of circular cross-section, of stainless steel: Cold-drawn or cold-rolled (cold-reduced)

7304.49

Other tubes and pipes, of circular cross-section, of stainless steel

7304.51

Tubes and pipes, of circular cross-section, of other alloy steel: Cold-drawn or cold-rolled (cold-reduced)

7304.59

Other tubes and pipes, of circular cross-section, of other alloy steel

7304.90

Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel.

*Where listed at the heading or subheading level, coverage includes all tariff items under that heading or subheading.

**Descriptions are included for illustrative purposes and do not necessarily reflect Harmonized System nomenclature.

Table 2

Tariff heading, subheading or item*

Description**

0403.10

Yogourt

0901.21

Coffee, roasted: Not decaffeinated

1602.32.11

Prepared meals: Of spent fowl; Specially defined mixtures

1602.32.92

Other: Specially defined mixtures, other than in cans or glass jars; Spent fowl other than in cans or glass jars

1602.50.10

Prepared meals, of bovine

1602.50.99

Other prepared or preserved meat of bovine, other than in cans or glass jars

1702.20

Maple sugar and maple syrup

1704.90.20

Liquorice candy; Toffee

1704.90.90

Other sugar confectionery (including white chocolate), not containing cocoa.

1806.31

Other chocolate, in blocks, slabs or bars: Filled

1806.32

Other chocolate, in blocks, slabs or bars: Not filled

1905.90.51

Pizza and quiche

2001.10

Cucumbers and gherkins

2007.99.10

Strawberry jam

2007.99.90

Nut purées and nut pastes, berry purées, other fruit purées other than banana purée, other jams, jellies

2009.12

Orange juice: Not frozen, of a Brix value not exceeding 20

2103.10

Soya sauce

2103.20

Tomato ketchup and other tomato sauces

2103.30.20

Prepared mustard

2103.90

Mayonnaise, salad dressing, mixed condiments and mixed seasonings, other sauces

2104.10

Soups and broths and preparations therefor

2202.10

Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured

2208.30

Whiskies

3304.30

Manicure or pedicure preparations

3305.30

Hair lacquers

3307.10

Pre-shave, shaving or after-shave preparations

3307.49

Preparations for perfuming or deodorizing rooms, including odoriferous preparations used during religious rites, nes

3401.30

Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap

3402.20.10

Automatic dishwasher detergents

3406.00.90

Other candles and tapers and the like not including those for birthdays, Christmas or other festive occasions

3506.10

Products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg

3808.91.10

Insecticides: In packages of a gross weight not exceeding 1.36 kg each

3808.92.10

Fungicides: In packages of a gross weight not exceeding 1.36 kg each

3808.93.10

Herbicides, anti-sprouting products and plant-growth regulators: In packages of a gross weight not exceeding 1.36 kg each

3923.21.90

Other sacks and bags (including cones) of polymers of ethylene

3923.29.90

Other sacks and bags (including cones) of other plastics, nes

3924.10

Tableware and kitchenware

3924.90

Household articles and hygienic or toilet articles, of plastics

4412.39

Plywood, consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm thickness: Other, with both outer plies of coniferous wood

4412.99.90

Other plywood, veneered panels and similar laminated wood

4802.56

Other paper and paperboard, not containing fibres obtained by a mechanical or chemi-mechanical process or of which not more than 10% by weight of the total fibre content consists of such fibres: Weighing 40 g/m² or more but not more than 150 g/m², in sheets with one side not exceeding 435 mm and the other side not exceeding 297 mm in the unfolded state

4811.59

Other paper and paperboard coated, impregnated or covered with plastics (excluding adhesives)

4818.10

Toilet paper

4818.20

Handkerchiefs, cleansing or facial tissues and towels

4818.30

Tablecloths and serviettes

4822.10

Bobbins, spools caps and similar supports of a kind used for winding textile yarn, of paper pulp, paper or paperboard (whether or not perforated or hardened)

4822.90

Other bobbins, spools caps and similar supports of paper pulp, paper or paperboard (whether or not perforated or hardened)

4909.00

Printed or illustrated postcards; printed cards bearing personal greetings, messages or announcements, whether or not illustrated, with or without envelopes or trimmings.

7310.10

Beer kegs, of iron or steel, of a capacity of 50 litres or more

7310.29

Beer kegs, of iron or steel, of a capacity of less than 50 litres

7321.90

Parts of iron or steel, of stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbeques, braziers, gas-rings, plate warmers and similar non-electric domestic appliances

76.04

Aluminum bars, rods and profiles

76.05

Aluminum wire

76.06

Aluminum plates, sheets and strip, of a thickness exceeding 0.2 mm

76.07

Aluminum foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm

76.08

Aluminum tubes and pipes

76.09

Aluminum tube or pipe fittings (for example, couplings, elbows, sleeves)

76.10

Aluminum structures (excluding prefabricated buildings of heading 94.06) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles, tubes and the like, prepared for use in structures

76.11

Aluminum reservoirs, tanks, vats and similar containers, for any material (other than compressed or liquefied gas), of a capacity exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment

76.12

Aluminum casks, drums, cans, boxes and similar containers (including rigid or collapsible tubular containers), for any material (other than compressed or liquefied gas), of a capacity not exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment

76.13

Aluminum containers for compressed or liquefied gas

76.14

Stranded wire, cables, plaited bands and the like, of aluminum, not electrically insulated

76.15

Table, kitchen or other household articles and parts thereof, of aluminum; pot scourers and scouring or polishing pads, gloves and the like, of aluminum; sanitary ware and parts thereof, of aluminum

76.16

Other articles of aluminum

8418.10

Combined refrigerator-freezers, fitted with separate external doors

8419.19

Instantaneous or storage water heaters, non-electric: Other than instantaneous gas water heaters

8422.11.90

Other dish washing machines, other than of the household type

8433.11

Mowers for lawns, parks or sports-grounds: Powered, with the cutting device rotating in a horizontal plane

8450.11

Household or laundry-type washing machines, each of a dry linen capacity not exceeding 10 kg: Fully-automatic machines

8450.20

Household or laundry-type washing machines, each of a dry linen capacity exceeding 10 kg

85.37

Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 85.35 or 85.36, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of Chapter 90, and numerical control apparatus, other than switching apparatus of heading 85.17

8903.10

Inflatable boats

8903.91

Sailboats, with or without auxiliary motor

8903.92

Motorboats, other than outboard motorboats

8903.99.90

Outboard motorboats, other vessels for pleasure or sports, nes

90.32

Automatic regulating or controlling instruments and apparatus

9401.61

Other seats, with wooden frames: Upholstered

9404.21

Mattresses of cellular rubber or plastics, whether or not covered

9404.29

Mattresses of other materials

9404.30

Sleeping bags

9404.90

Other bedding and similar articles, nes

9504.40

Playing cards

9608.10

Ball point pens

9608.20

Felt tipped and other porous-tipped pens and markers

*Where listed at the heading or subheading level, coverage includes all tariff items under that heading or subheading.

**Descriptions are included for illustrative purposes and do not necessarily reflect Harmonized System nomenclature.

To view the original article click here

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions