Many employers say retaliatory measures 'almost as damaging as U.S. tariffs themselves'
The Canadian Federation of Independent Business (CFIB) is welcoming Ottawa's decision to remove retaliatory tariffs on some U.S. goods.
“This is a step in the right direction and will take some of the pressure off Canadian small businesses as trade talks continue,” said Corinne Pohlmann, executive vice-president of advocacy at CFIB.
“Many small business owners have told us that Canada's retaliatory measures were almost as damaging as the U.S. tariffs themselves. Nearly 6 in 10 small firms report they were hurt by Canada's counter-tariffs, with only steel and aluminum tariffs doing more harm. Those were not touched today, so the challenges for those businesses remain. While small firms were in favour of Canadian counter-tariffs as the trade war began, their support has been falling since February.”
Retaliatory tariffs on U.S. goods
The federal government will remove all retaliatory tariffs on United States goods covered by the Canada-U.S.-Mexico Agreement (CUSMA) by Sept. 1, Prime Minister Mark Carney announced, according to a CBC report.
Carney stated that, despite the ongoing trade dispute and U.S. tariffs on Canadian steel, aluminum, autos, copper, lumber, and energy, 85% of trade between the two countries remains tariff-free. He described this as a unique advantage for Canadian workers and their families.
"As we work to address outstanding trade issues with the U.S., it is important we do everything we can to preserve this unique advantage for Canadian workers and their families," Carney said, according to CBC.
Tariffs on U.S. steel, aluminum, and automobiles will remain in place as the federal government continues negotiations with the United States on a new trading relationship, according to the report.
The Canadian government has imposed retaliatory tariffs on U.S. goods three times since the trade dispute began, including counter-tariffs on $60 billion worth of U.S. consumer goods and additional tariffs on U.S. autos, steel, and aluminum. However one expert from the Canadian Centre for Policy Alternatives (CCPA) previously warned that “a perfectly reciprocal response” to Trump’s tariffs on Canada could “worsen the situation” on the Canadian side.
Trade disruptions for businesses
The CFIB also said that many businesses have already paid millions of dollars in counter-tariffs, and called on the federal government to “immediately release its tariff revenue to small businesses directly and indirectly affected by trade disruptions and work quickly to resolve small business requests still tied up in the remissions process."
Nearly one in five (19%) Canadian small businesses facing tariff-related costs say they will not survive more than six months if current conditions persist, according to a recent report from the CFIB.
Earlier this month, Canadian business groups urged the federal government not to rush into a trade agreement with the U.S., warning that ongoing uncertainty is already affecting companies and their employees. The call for caution comes after Trump imposed 35% tariffs on a range of Canadian goods. Groups representing small businesses, steel producers, and other sectors said that “no deal is better than a bad deal,” according to a report from The Canadian Press (CP).
Union unhappy with change to tariffs
Meanwhile, Unifor criticised Carney’s move.
“Walking back counter-tariffs is not an olive branch—it’s an open invitation for more U.S. aggression. It sends the wrong signal at the worst possible moment,” said Unifor National President Lana Payne.
The union said that Canada’s leverage must be used to defend Canadian jobs—not bargained away without reciprocity. Unifor has consistently called for a strong retaliatory response to the U.S.’s “punitive” tariffs.
“Canada should not give up counter-tariffs unless the U.S. drops all of its unfair tariffs. Backing down with concessions is a betrayal of the workers who are and will be paying the price,” said Payne. “Trade leverage is not just a bargaining chip, it’s also a shield. If Canada surrenders that shield without real gains, our workers and communities will be left exposed. That is unacceptable.”
Carney’s announcement follows a July 31 executive order by U.S. President Donald Trump, which raised tariffs on certain Canadian goods to 35%, according to the CBC report. The Trump administration said the move was in response to fentanyl trafficking and Canada’s earlier counter-tariffs. The 35% tariff rate applies only to goods not covered by CUSMA.
