Pro Tips
Basics
Canadian Tariffs On US Goods Prior To 2025
Apr 13, 2025
Amidst the complexity of international trade, tariffs can quickly shift a company's bottom line. For example 2018, when then-president Donald Trump imposed tariffs on steel and aluminum imports, Canada retaliated with tariffs on over 250 American goods, many of which were exported by U.S. companies to Canadian customers.
As we approach the next round of Trump tariffs set for 2025, U.S. businesses should prepare for the potential impact of Canadian tariffs on American goods. This guide will help readers understand Canadian tariffs on U.S. goods before 2025.
As you gear up for the upcoming changes, GoMoon's AI-powered economic calendar can help you stay on top of the latest developments, including Canadian tariffs on U.S. goods before 2025. This tool tracks essential dates and developments that could impact your business, giving you the information you need to prepare and adapt.
Table of Contents
What Are Tariffs?
The government imposes tariffs on goods and services imported from other countries. When a country imports products, it can apply a fee (tariff) on those products at the border before they are sold within the country. This makes imported goods more expensive and, ideally, makes domestic goods more competitive. The main goal of tariffs is to protect domestic industries, generate government revenue, or respond to foreign trade practices (e.g., retaliation).
Types of Tariffs
There are three main types of tariffs.
Ad Valorem Tariffs
These are based on a percentage of the good’s value. For example, a 10% tariff on a car worth $30,000 would mean a $3,000 tariff.
Specific Tariffs
A fixed fee per unit of the good, such as $50 per ton of steel.
Mixed Tariffs
Combines specific and ad valorem, like 10% of the value + $25 per unit.
Why Governments Use Tariffs
Protect local jobs and industries
By making foreign goods more expensive, domestic companies may see more demand.
Retaliation
If another country imposes tariffs, a government may respond with its own.
Trade leverage
Tariffs often pressure foreign governments during trade negotiations.
Revenue generation
In developing countries, tariffs may provide a significant share of national income.
Impact of Tariffs on Trade
Tariffs affect every player in the supply chain:
Importers
face higher costs, which are often passed to consumers.
Consumers
May see price increases and fewer choices.
Exporters
(from the targeted country) may experience lower demand for their goods.
Financial markets
Often react quickly to tariff news, leading to volatility in stocks, currencies, and commodities.
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Canada’s Tariff Policies Before 2025
Canada’s approach to tariffs emphasizes global trade agreements. The country has long championed the rules-based system under the World Trade Organization. Here, Canada agreed to bound tariff limits, which means it can’t impose duties above a certain level without a valid reason. NAFTA (North American Free Trade Agreement) also shaped Canada’s tariff strategy.
The agreement, which created a largely tariff-free zone between Canada, the U.S., and Mexico, was in place until 2020 when the USMCA replaced it. These frameworks shaped Canada’s posture: avoid tariffs where possible, and use them only when necessary to defend national industries.
1. Tariffs on Specific U.S. Products
While Canada generally kept tariffs low, there were strategic exceptions, especially in:
Dairy and Poultry
Protected under Canada’s supply management system. High tariffs were used to shield local farmers from cheaper U.S. imports.
Softwood Lumber
This sector was a long-standing dispute zone between Canada and the U.S., with tariffs frequently imposed by both sides depending on the outcome of trade cases.
So even before 2025, traders had to monitor commodity-sensitive industries like agriculture and forestry.
2. The Trump Factor (2016–2020)
During Donald Trump’s first term as U.S. President, Canada’s tariff environment shifted due to aggressive U.S. trade policies:
2018 Steel & Aluminum Tariffs
The U.S. imposed Section 232 tariffs (25% on steel, 10% on aluminum), claiming national security grounds.
Canada’s Response
Ottawa retaliated with reciprocal tariffs on $16.6 billion worth of U.S. goods — everything from steel and aluminum to household items like ketchup and motorboats.
This tit-for-tat episode reminded traders that tariff risks aren't just theoretical — they can escalate fast and affect forex pairs like USD/CAD.
3. Stable Yet Cautious Policy Framework
Until 2025, Canada's tariff strategies were:
Predictable under multilateral trade rules.
Reactive when provoked, particularly by U.S. policies under Trump.
Targeted, not sweeping — Canada applied tariffs selectively, not across entire sectors or countries unless responding to aggression.
This made Canada a generally stable trading partner but enabled it to shift stance quickly when political or economic interests were threatened.
Why This Matters for Traders
Volatility Cues
Even before 2025, changes in Canada’s tariff policy often created short-term volatility in CAD-related forex pairs and affected sectors like lumber, agriculture, and metals.
Sentiment Signals
Canada’s decisions often signaled geopolitical stress—retaliatory tariffs typically followed U.S. trade aggression, which traders could interpret as risk-off triggers.
Commodities Watch
Many Canadian exports tied to tariff disputes (like lumber or aluminum) affect commodity markets and their impact on the Canadian dollar.
Canada’s Tariffs on U.S. Goods in 2025
The Trigger: Trump’s Second-Term Trade Agenda
In early 2025, President Donald Trump, fresh off his re-election, reintroduced aggressive tariff policies as part of his “America First 2.0” approach. The main goal of this strategy was to target Canada again for what he perceives as unfair trade practices. Under this plan, he again imposed tariffs on Canadian steel and aluminum, mirroring his first-term strategy.
He threatened tariffs over water treaty disputes and energy exports. He continued criticizing trade imbalances, blaming Canada for unfairly benefiting from U.S. consumption. This renewed tension forced Canada to respond, just like in 2018.
Canada’s Countermeasures: $29.8 Billion in Tariff Hits
On March 13, 2025, Canada immediately responded with 25% tariffs on a broad range of U.S. goods. The Department of Finance Canada announced this, and key highlights include:
Scope
Tariffs only apply to goods originating from the U.S., not goods passing through. Exemptions apply to U.S. goods already in transit as of March 13. They remain in effect until the U.S. removes its tariffs on Canadian metals.
Categories Affected
Consumer goods: candles, kitchenware, umbrellas, imitation jewelry.
Industrial goods: stainless steel pipes, rods, fittings, aluminum alloys.
Household products: ceramic mugs, enamel cookware, decorative ceramics.
Raw materials: gold and platinum semi-manufactured forms, stainless steel coils, metal sheets.
This is not a symbolic retaliation — these categories affect manufacturing, retail, and industrial importers.
Key Differences From Previous Tariffs
The 2025 tariffs differ significantly from previous tariffs in a few ways. First, they have a broader range. While the 2018 tariffs mainly focused on steel and aluminum, the 2025 tariffs touched consumer and industrial segments.
Second, the dollar value of the 2025 tariffs is much more significant. $29.8 billion worth of goods is a significant escalation, reflecting Canada’s stronger stance. Finally, the timing of the tariffs is striking. They took effect within two months of Trump’s re-election, showing how fast trade friction can build.
Why This Matters for Traders
The renewed trade tensions between the U.S. and Canada create uncertainty for traders and investors. First, the tariffs create uncertainty about the U.S.–Canada trade relationship, often weighing on CAD due to fears of lower Canadian exports.
Next, since metals like aluminum and steel are central to this conflict, base metals markets become more volatile, impacting mining stocks and futures. Finally, traders focused on consumer stocks (like cookware or furniture brands) must track supply chain risks if they rely on cross-border inputs.
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How Traders Can Take Advantage of Canadian Tariffs in 2025
Identify Currency Moves Before They Happen
Canadian tariffs often create CAD (Canadian Dollar) movement because Canada is a highly trade-dependent economy.
Here’s how to trade it
If tariffs escalate, the Canadian dollar tends to weaken due to fears of slowed exports and rising business costs.
Strategy
Go long USD/CAD during early tariff announcements or retaliation phases. If tariffs are lifted or negotiations progress, CAD can rally due to renewed confidence in trade stability.
Strategy
Go short USD/CAD when Canadian officials announce easing tensions or U.S. exemptions.
Other pairs to watch
CAD/JPY – risk sentiment proxy. AUD/CAD – commodities comparison (especially aluminum, steel, energy).
Use Tariff News To Guide Sector-Specific Stock Trades
Use Canadian tariff updates to identify industries that are directly impacted:
Steel & Aluminum Stocks
Canada often attacks U.S. metals in retaliation. U.S. steel exporters are hit, but Canadian steel producers may gain market share.
Strategy
Short U.S. metal exporters like Nucor or U.S. Steel when tariffs are announced. Consumer
Goods Importers
Watch retail sector stocks if Canada targets U.S. home products (kitchenware, ceramics, tools).
Strategy
Short consumer companies heavily depend on the U.S.-Canada trade flow (like cookware, decor brands).
ETFs to track
EWC – iShares MSCI Canada ETF
XME – SPDR Metals & Mining ETF
SLX – VanEck Steel ETF
Stay Ahead of the News With Government Data
Traders can get ahead by tapping into government-level data.
Here’s where
The Canadian Department of Finance publishes tariff lists and enforcement updates. https://www.canada.ca/en/department-finance.html
CBSA (Canada Border Services Agency)
Announces changes to import requirements and real-time administration of new tariffs.
White House and Trump’s Official Site/X (Twitter)
Trump often breaks tariff news directly on social media before it becomes official.
Set up alerts for keywords like
“Tariffs,” “Canada retaliation,” “Trade war.”
Use TweetDeck or GoMoon.ai to create real-time alerts tied to FX sentiment signals.
Combine GoMoon.ai With TradingView or MT4 Alerts
To fully automate your edge:
Use GoMoon.ai to
Track Trump + Trade mentions in real-time—sync alerts with forex heatmaps, news sentiment scores, and asset impact meters. Replay past tariff events for pattern recognition.
Use TradingView to
Set price alerts on CAD/USD at key support/resistance. Overlay news impact from economic calendars and Canadian government updates.
If you're using MT4 or MT5, add custom indicators that trigger alerts on CAD weakness post-tariff headlines and volume spikes on Canadian equity ETFs.
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