U.S. Response to Canada's Counter-tariffs 

• The U.S. response to Canada's counter-tariffs was threefold: stop imports of some products, remove tariffs on a handful of products, and introduce new tariffs on others.  
• The products excluded from import include whey, alcoholic beverages, and motorcycles. The exclusions begin on September 29th and represented less than 0.3% of U.S. imports from Canada in 2025. 
• New 50% duties were applied to a set of products including dairy, alcoholic beverages, metal and paper products, and outboard motors beginning September 15th. These products amounted to 0.6% of U.S. imports from Canada in 2025. 
• Some of the previously applied 50% tariffs that took effect in August are set to be removed, including cement, sugars, toilet paper, and fishing rods starting on September 15th. These products accounted for 0.5% of U.S. imports from Canada in 2025. 
• The President has also raised the prospect of excluding Canadian businesses from the Multiple Award Schedule program. The program is used by government agencies for some procurement, including IT and office supplies. The total program covered $50 billion U.S. in purchases last year, however it is unclear about the timing of the implementation, and the share of purchases from Canadian firms is likely small.  

Key Implications

• The new trade restrictions and duties should not have a material impact on Canadian growth in the near-term. However, it’s another manifestation of policy uncertainty and concerns about market access to the United States weighing on Canadian firms.  
• The U.S. shifted what is covered by the tariff umbrella but has landed on a similar dollar amount that will be tariffed. But by our estimate, the U.S. removed tariffs on roughly 20 products, replacing them with a larger scatter shot across 300+ products on the new tariffs.  
• Although the shift in tariff focus is minor across provinces, the regional impacts will be more felt in Ontario, Quebec, New Brunswick and Nova Scotia. British Columbia is expected to be net neutral from the most recent changes.  
• At this point, we believe that the likelihood of further Canadian escalation is low. Prime Minister Carney has already pivoted to a focus on domestic issues, highlighted by next week’s investment summit, followed by a fall budget and ongoing initiatives on major projects.  
  
   

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