Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Trump’s April 2025 Tariffs and What They Mean for Canada
Tariffs | April 3, 2025
Image: Freepik AI
Trump's Tariffs Shake Global Trade — Canada Exempt But Still at Risk
On April 2 2025, President Trump announced a massive shift in U.S. trade policy with a litany of universal and country specific tariffs that will affect global trade flows. He declared a 'national emergency' over the U.S. trade deficit, and said that it was a threat to America's national security. The U.S. will now apply tariffs (essentially a tax) on all imports entering the country. While Canada and Mexico were exempt from this round of April 2 'liberation day tariffs', Prime Minister Mark Carney vowed to push back against the existing tariffs currently applied to Canada.
See: What Fintechs Need to Know About New U.S. Tariffs
Uncertainty of global trade has hit global stock markets hard, with broad indexes declining 4%, as investors flee to safe assets. Investors are expecting higher input costs, slower global trade growth and escalating retaliation from affected countries.
President Trump said:
“Our country has been looted by nations near and far. Now it’s our turn to prosper... and use trillions to pay down our debt.”
What Was Announced
- A 10% universal tariff on ALL imports to take effect April 5, 2025.
- Countries deemed to have 'unfair' trade practices with the U.S. will have country specific higher tariffs that will take effect April 9, 2025.
- The tariff rates were calculated based on formal existing tariffs plus “non-tariff barriers” like regulatory restrictions, and then halved.
- A separate executive order on April 2 was signed that removes the “de minimis” exemption for shipments under $800 from China and Taiwan to take effect May 2, 2025. This directly affects platforms like SHEIN and Temu.
- Notably some countries like Russia, North Korea, Cuba and Belarus are exempt from this round of tariffs too, with the administration explaining that they are already facing high tariffs and imposed sanctions which effectively eliminates meaningful trade with those countries.
See this CTV news post for the full list of tariffs by country
| Country | Tariff Rate |
| Cambodia | 49% |
| Vietnam | 46% |
| Sri Lanka | 44% |
| Bangladesh | 37% |
| China | 34%+20% |
| Taiwan | 32% |
| Indonesia | 32% |
| Switzerland | 31% |
| South Africa | 30% |
| Pakistan | 29% |
| India | 26% |
| South Korea | 25% |
| Japan | 24% |
| European Union | 20% |
| Thailand | 36% |
| United Kingdom | 10% |
Exemptions and Overlaps
Canada and Mexico are currently exempt from the new April 2 country-specific and universal tariffs, ONLY if goods qualify under the United States-Mexico-Canada Agreement (USMCA) rules of origin.
However, Canada already faces a separate 25% tariff that was imposed in March 2025 on a broad set of goods and linked to fentanyl enforcement and immigration/border disputes. The 25% tariffs have been partially suspended but not entirely repealed - see White House fact sheet.
Sector-specific tariffs on Canada that were previously announced, such as those on steel, aluminum, autos (starting April 4), copper, and semiconductors, are not cumulative with the April 2 tariffs.
🇨🇦 Canada’s Response “We Will Fight Back”
While some products are still protected under USMCA, other key Canadian exports, such as raw materials, energy products, and manufactured goods — remain vulnerable. PM Mark Carney made it clear that Canada will retaliate "with purpose and force".
Ottawa's game plan includes preparing a set of counter-tariffs, providing emergency support for exporters, accelerate trade talks with Asia-Pacific and the EU, and incentivize domestic production and supply chain innovation (remove interprovincial trade barriers).
Update: Canada Matches U.S. Auto Tariff with 25% Countermeasure - PM Mark Carney announced today that Canada will implement a reciprocal 25% tariff on U.S. vehicles that do not comply with the Canada-United States-Mexico Agreement (CUSMA) to protect Canada's auto sector and its workforce. The new levies will apply to $35.6 billion CAD of imports.
What It Means for Canadian Fintech and SMEs
Broad sweeping tariffs will ignite a trade war and is a risk event for Canadian businesses. Small to medium sized businesses (SMEs) will find it difficult to absorb cost hikes and delays in exporting to America.
See: Canada and Trump Risk Index What Fintechs Need to Know
Fintech platforms in cross-border payments, lending, and logistics can offer supply chain risk and trade compliance tools. E-commerce platforms could see many global vendors move away from U.S-centric trade models.
Looking Ahead
Although Canada avoided the pain of the April 2 tariffs, the risks aren't gone. With a global trade war not afoot, supply chains will shift and Canada will feel the effects either directly or indirectly. Carney's call for a 'new economy' may go beyond just a response and become Canada's national strategy going forward. Brace for volatility and opportunity at the same time.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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