US Tariff Policy Analysis | Trump Administration Tariffs

Overview

President Trump announced a sweeping new set of “reciprocal” tariffs from the Rose Garden at the White House after the markets closed on April 2, 2025, in what he called “Liberation Day.”

On May 4, 2025, via a Truth Social post, President Trump announced a new 100% tariff on all foreign-made films and TV productions, instructing the Department of Commerce and USTR to “immediately begin the process” of implementing this tariff. This is estimated to affect approximately $3.2 billion in annual Canadian exports to the U.S., including both production services for U.S. studios and Canadian-owned films and TV sold to the U.S. market.

Meanwhile, on May 1, 2025, U.S. Customs and Border Protection released guidance clarifying that automobile parts compliant with the Canada-U.S.-Mexico Agreement (CUSMA) would be exempt from the 25% tariff on foreign-made auto parts that took effect on May 3, 2025. According to an RBC Economics report, approximately 90% of Canada's auto parts exports to the U.S. (representing about $17.55 billion of the $19.5 billion total) are CUSMA-compliant and thus exempt from these tariffs.

On April 12, 2025, the Trump administration clarified that smartphones, laptops, and other electronics from China would be exempt from the 125% tariff increase announced on April 9, 2025, but would still be subject to the existing 20% fentanyl tariffs. This exemption is estimated to cover approximately 35% of Chinese exports to the United States.

Just a few days prior, on April 9, 2025, President Trump had announced three significant changes to the tariff regime:

1. Increasing tariffs on Chinese imports (which we now know to be a total of 145% for most goods)
2. Implementing a 90-day pause on country-specific “reciprocal” tariffs while negotiations take place
3. Imposing a uniform 10% baseline tariff on all nations during this period, excluding Canada and Mexico, which remain exempt

And a few days prior to that, on April 5, 2025, the B.C. premier's office and the U.S. Lumber Coalition confirmed a dramatic increase in softwood lumber tariffs from 14.54% to 34.45%, affecting approximately $6.56 billion in Canadian lumber exports.

This analysis examines the economic impact of these tariffs across countries, with a special focus on their effect on Canadian exports to the United States. The data is based on official US Bureau of Economic Analysis (BEA) import figures for the full year of 2024, last updated on March 20, 2025.

Tariff Impact by Country

The chart below shows the total value of goods (in billions USD) from the top 15 countries that are subject to tariffs of 10% or higher under “reciprocal” tariffs or sector-specific tariffs.

China has the largest volume of exports subject to tariffs, with all $439.75 billion in goods facing at least a 20% tariff rate, and about 65% of those exports facing the full 145% tariff rate (20% fentanyl tariff plus 125% additional tariff). Electronics (smartphones, laptops, etc.) are exempt from the 125% additional tariff but still face the 20% fentanyl tariff. A small portion of Chinese exports (0.21%)—specifically electric vehicles and syringes/needles—face the highest tariff rate of 245%. Although Mexico has $515.95 billion in exports to the US, only specific sectors are facing tariffs.

In Canada's case, approximately $73.76 billion of goods (primarily steel, aluminum, automotive products, and softwood lumber) are subject to tariffs of 10% or higher. This represents around 17.5% of Canada's total exports to the United States. The recent increase in softwood lumber tariffs from 14.54% to 34.45% has added $6.56 billion in goods to the tariffed total.

Impact on Canadian Exports

Canada faces 25% tariffs on steel, aluminum, and non-CUSMA-compliant auto parts (about 10% of total auto parts exports), as well as 12.5% tariffs on automobiles and a new 100% tariff on films and TV productions. For automobiles, the effective rate is reduced to 12.5% due to the fact that vehicles assembled in Canada typically contain more than 50% American parts. CUSMA-compliant auto parts (approximately 90% of auto parts exports) are exempt from tariffs based on U.S. Customs and Border Protection guidance released on May 1, 2025. The softwood lumber tariff rate of 34.45% is scheduled to take effect in August 2025, and comes despite ongoing Canadian legal challenges at the WTO and the U.S. Court of International Trade against previous tariff hikes (from 8.05% to 14.54%) implemented in August 2024.

Note that the weighted annual tariff impact on Canadian exports of $ billion is a crude benchmark, constructed to provide a single number to compare the impact of US tariffs on countries facing sector-specific tariffs (i.e., Canada and Mexico) vs. “reciprocal” tariffs (i.e., all other countries). It is not a prediction of the actual impact on Canadian exports into the US in 2025.

What This Means for Canadians

These tariffs will significantly impact Canadian manufacturers and exporters, particularly in the automotive, steel, aluminum, and softwood lumber sectors, as well as the film industry in Canada. The weighted annual impact of $ billion represents a substantial economic burden that will likely lead to:

• Higher prices for Canadians on goods containing US components
• Potential job losses in export-oriented manufacturing sectors
• Significant challenges for Canada's forestry industry, especially in British Columbia
• Redirection of Canadian exports to other markets
• Incentives for Canadian companies to source materials and components domestically

In response to these economic challenges, many Canadians are seeking domestic alternatives to American-made products. USAboycott.ca provides resources to help identify Canadian-made options across various product categories.

Complete Tariff Table

Below is a comprehensive list of the “reciprocal” tariff rates announced on April 2, 2025 (“Liberation Day”), along with the weighted annual impact of the “reciprocal” tariffs (and sector-specific tariffs).

* Canada and Mexico are not subject to the new “reciprocal” tariffs but face specific tariffs on steel (25%), aluminum (25%), automobiles (12.5%), and non-CUSMA-compliant auto parts (25%). Canada also faces a 34.45% tariff on softwood lumber exports (increased from 14.54% on April 5, 2025) and a newly announced 100% tariff on films and TV productions (announced May 4, 2025).

Sources and Methodology

The data presented on this page is based on 2024 import values from the Bureau of Economic Analysis (BEA), last updated on March 20, 2025, and the tariff rates announced by the US administration, including the most recent May 4, 2025 announcement by President Trump on Truth Social of a 100% tariff on foreign-made films and TV productions, and the May 1, 2025 U.S. Customs and Border Protection guidance clarifying that CUSMA-compliant auto parts are exempt from the 25% tariff on foreign-made auto parts.

Our analysis also incorporates the April 9, 2025 updates (China's tariff increase to 125%, the 90-day pause on country-specific reciprocal tariffs, and the new baseline 10% tariff on all nations, excluding Canada and Mexico). The softwood lumber tariff increase to 34.45% confirmed on April 5, 2025 by the B.C. premier's office and the U.S. Lumber Coalition is also included in our analysis. Additionally, we've incorporated the April 15, 2025 White House fact sheet clarification regarding China's “up to 245%” tariff structure, which applies specifically to electric vehicles and syringes/needles, representing approximately 0.21% of China's total exports to the US.

For Canada and Mexico, we calculated the total tariff impact by considering only the sectors affected by tariffs. For Canada, this includes steel and aluminum (25% tariffs), automobiles (12.5% tariff), non-CUSMA-compliant auto parts (25% tariff, affecting approximately 10% of auto parts exports), softwood lumber (34.45% tariff), and films/TV productions (100% tariff). The rate for automobiles is estimated at 12.5% instead of the full 25%, reflecting that roughly 50% of Canadian auto exports contain American parts. Based on the May 1, 2025 U.S. Customs and Border Protection guidance, approximately 90% of Canada's auto parts exports to the U.S. are CUSMA-compliant and therefore exempt from tariffs, according to an RBC Economics report.

This analysis will be updated as new information becomes available or as tariff policies change.