Tariffs: Canada’s Response to U.S. Trade Policies

Tuesday’s announcement of counter-tariffs on 874 U.S. goods is a decisive step to defend Canada’s economic interests, says the Retail Council of Canada.

In a LinkedIn post, Kim Furlong, CEO of the Council, said the national organization supports the federal government’s response and stands behind a united national effort.

“Canada’s retail sector will shoulder a significant share of this burden, with so many essential consumer goods targeted. At a time when Canadian consumers are already stretched, retailers are working to balance the important goal of supporting Canadian producers with the need to offer affordable choices to Canadians.

“Retailers are ready to rise to the occasion, working with the federal government to ensure Canada’s tariff response is strategic, maximizes impact on the U.S., and minimizes the impact on everyday Canadians.

“Canadian retailers have long championed domestic producers, and we are accelerating that commitment today. We will redouble our efforts to source, promote and buy Canadian, while continuing to give consumers the choice and value they need. Our goal is clear: strengthen Canadian supply chains and support Canadian producers without adding unnecessary pressure to household budgets. By working together, our sector can keep shelves stocked, support Canadian jobs and help protect Canadian families through the challenges ahead.”

Restaurants Canada said it stands with the Government of Canada in defending Canadian economic interests and responding to the latest U.S. tariffs.

It said it is pleased that the proposed measures avoid many of the priority food products it identified to government based on member input. This will help limit additional pressure on food costs and menu prices and protect jobs and Canada’s food supply chain.

“Our review has also identified areas of concern, including some packaging and restaurant equipment, and we are assessing the potential impact of other products included in the proposed measures. We will use the consultation period to seek targeted exemptions where sufficient Canadian or alternative supply is not available,” said the organization.

“More broadly, we encourage the government to consider other measures to help Canadians and businesses manage the economic pressures arising from the trade dispute, including extending the temporary suspension of the federal fuel excise tax on gasoline and diesel beyond September 7.

“Our objective is to help ensure Canada’s response is targeted and effective, with careful consideration of the impact on food costs, Canada’s food supply chain, jobs and investment. Canada’s $125-billion restaurant industry directly employs 1.2 million Canadians, nearly 40% of whom are youth, and supports another 287,000 jobs across the economy. Restaurants purchase approximately $43 billion in food and beverages each year, including roughly $30 billion from Canadian suppliers, making the sector a major purchaser of Canadian agricultural products and an important contributor to the broader Canadian food economy.”

“Restaurants are behind the government in standing up for Canada in this trade fight. We appreciate that it has listened to the concerns raised by our industry and avoided tariffs on many of the priority food products we identified. There are still some important issues to address, and we will continue working with government to get those right. Our focus is on ensuring Canada’s response is as targeted and effective as possible, recognizing the impact these decisions can have on Canadian businesses, jobs, communities and consumers,” said Kelly Higginson, President and CEO at Restaurants Canada.

The federal government announced on Tuesday that effective September 8, Canada will impose counter-tariffs on the U.S. of 15, 25 and 50 per cent on products drawn from those targeted by U.S. Section 338 and Section 232 tariffs, with the rate for each product matching the corresponding U.S. rate.

“Canada’s counter tariffs will apply to products covering $27.6 billion in imports from the U.S. and will focus on sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, that are most impacted by U.S. tariffs,” it said.

“In addition, to support Canadian workers and businesses impacted by U.S. tariffs, the government is also introducing a $7.5 billion package of new and enhanced measures that deliver fast, simple and agile supports to Canadian workers and businesses, building on the nearly $25 billion in supports the government has provided since the implementation of the U.S. unjustified tariffs.”

Dan Kelly, President at the Canadian Federation of Independent Business (CFIB), the national organization appreciates that the government is trying to move quickly, but at first glance it looks like small business owners are being served the usual alphabet soup of complicated programs. They will be challenging for small business owners to figure out, let alone use.

“To date, the federal Regional Tariff Response Initiative (RTRI) delivered by Regional Development Agencies have excluded most small businesses from even applying. Some required a minimum of $2 million in sales, others a minimum of 10 employees. Today’s announcement doesn’t appear to have changed these thresholds. Unless the thresholds are eliminated entirely, then the government will have failed in its promise to support small business owners. The new U.S. 50% tariff hits even the smallest home-based jewellery maker, so why would our government’s support exclude them?,” he explained.

“What we are looking for is one simple program for small businesses that removes as much of the burden of tariffs as possible, ideally delivered by the Canada Revenue Agency. Instead, we have a patchwork of agencies and programs that no small business has ever heard of before, largely delivering loans to businesses that will have no ability to pay them back.

“While I respect Canada’s need to respond to the U.S. threat, the giant list of counter tariffs will create their own severe challenges for many small businesses who have already done what they can to seek new sources of supply. Canada’s support programs need to be available for companies that use, import or distribute U.S. products too.

“And for tens of thousands of other businesses, the trade war will mean more uncertainty, higher input costs and lower consumer demand due to its indirect impacts. CFIB is urging the federal government to deliver an immediate cut to the small business tax rate, retroactive to January 1, 2026. The government already publicly signaled a focus on small business in the 2026 fall budget. Doing it now would send a much-needed reassuring message to Canada’s entrepreneurs.

“We’re also urging the government to extend the suspension of the federal excise tax on gasoline and diesel. It’s set to expire on Sept. 7, one day before retaliatory tariffs kick in. The timing couldn’t be worse to see taxes and fuel prices rise.

“I do recognize that it is very challenging to get programs right in a matter of days. As we did during the pandemic, CFIB stands ready to work closely with the federal government and all parliamentarians to find ways to make any supports work for Canada’s small business community.”