Canada–U.S. trade update: What members need to know
Canada–U.S. trade negotiations have broken down, resulting in new U.S. tariffs on Canadian goods and matching Canadian counter-tariffs on U.S. imports. Canada’s new counter-tariffs will take effect on September 8 and range from 15% to 50%.
While the measures are often discussed under broad categories such as dairy, automotive, steel and aluminum, their impact extends into Canada’s natural, organic and wellness (NOW) industry.
This week, CHFA hosted a webinar with trade expert Dr. Ann Penner to provide members with insight into the situation and answer questions. She emphasized that trade negotiations do break down and described this development as a significant bump in what is likely to remain a bumpy road.
Determine if your business is impacted
Businesses should review the codes carefully to determine whether their finished products, ingredients, packaging or other inputs are affected.
Products relevant to the NOW industry appearing on the tariff lists include:
- Dairy and dairy-derived ingredients, including:
- Milk and cheese
- Whey and whey protein
- Other dairy proteins
- Products containing dairy, whey or cheese, including:
- Sports nutrition and functional nutrition products
- Protein bars and meal replacements
- Snacks and granola
- Certain bakery mixes and doughs
- Natural honey and honey-containing products
This is not an exhaustive list. It is intended to demonstrate the breadth of products that may be affected. Whether a specific product is subject to a tariff depends on factors including its HS classification, composition, origin and direction of trade.
Members should also consider indirect costs. Aluminum tariffs, for example, could affect cans and other packaging—even if the finished product itself is not directly listed.
What about CUSMA?
These tariffs undermine the tariff-free trade framework established under the Canada–United States–Mexico Agreement (CUSMA). Although the current measures may apply even to some CUSMA-compliant goods, Dr. Penner recommended businesses do everything possible to ensure their products meet CUSMA rules of origin.
Historically, CUSMA compliance has offered one of the strongest forms of protection against tariffs. It also leaves businesses better positioned as trade measures and negotiations continue to evolve.
What should businesses do now?
- Work closely with their customs broker to confirm the correct HS codes for all imports and exports.
- Review the tariff lists at the individual code level.
- Confirm whether products qualify as CUSMA-compliant and maintain the required documentation.
- Assess ingredients, finished products, packaging and equipment—not only your primary product category.
- Evaluate potential effects on costs, pricing, margins, sourcing and cross-border customers.
Tariff Remission
The Government of Canada’s tariff-remission process remains available.
Members who previously received relief should automatically receive relief if the tariffs impact them. Businesses that were not previously covered will need to submit a new remission request.
Funding support for affected businesses
Separate from tariff remission, the Government of Canada announced new and expanded funding and financing programs for tariff-affected businesses. Eligibility and application details are still to come.
- $1.5 billion through the Regional Tariff Response Initiative to help small and medium-sized businesses respond to tariff pressures.
- An additional $500 million through BDC’s Pivot to Grow program, offering working-capital loans of $250,000 to $5 million to directly affected businesses, regardless of sector.
- A new $2-billion Canada Strong Diversification Fund to support tariff-affected businesses with shovel-ready projects and capital needs.
The government is also expanding support through the existing Large Enterprise Tariff Loan facility. Full eligibility and application details have not yet been released. CHFA will share more information as it becomes available.
Tell us how your business is being affected
CHFA will be gathering information from members to understand how these tariffs are affecting the NOW industry and to bring that evidence directly to government.
Specific, real-world examples are the most impactful. We want to hear about increased costs, supply-chain disruptions, sourcing challenges, delayed investments, lost customers or other consequences for your business.
If you have any questions or requests on how we can support you further, please email us at regulatory@chfa.ca
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