After the trade talks to suspend the 50% tariff, based on Section 338 of the Tariff Act, on about USD 20 billion of imports from Canada broke down, the Canadian government announced a “dollar for dollar” counter tariff program.
According to their announcement, “Canada’s counter tariffs will apply to products covering [CAD]27.6 billion in imports from the US and will focus on sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, that are most impacted by US tariffs.”
CAD 27.6 billion equals USD 20 billion at an exchange rate of CAD 1.38 per USD, hence it is called “dollar for dollar.” But when we add up the 629-item counter-tariff list, we would find that the tariffed values on both sides are far from equal.
Using the full-year 2025 import values to add up the counter-tariffed items, we would see that the total import value amounted to CAD 31.8 billion, which is 15% higher than the CAD 27.6 billion figure stated in the “dollar for dollar” announcement.
What happened?
We asked Finance Canada for clarifications; they offered two points:
- The amount should be based on 2024 import value from the US; and,
- The amount should also exclude the value of existing remissions and other relieving mechanisms.
Let’s consider point 1. Swapping 2024 import value actually widens the discrepancy further. The counter-tariffed US imports would be worth more than CAD 36.1 billion—CAD 8.5 billion above the dollar for dollar figure.
This makes “remission and relief” an important factor to “equalize” the claims. The relief program for this round of counter tariff has not been revealed as of writing. Prior to that, the Canadian government has been offering remission to importers, especially to those who import steel and aluminum.
According to the government’s Spring Economic Update 2026, it has collected CAD 9.7 billion worth of tariff revenue from US imports. At the same time it has remitted CAD 5.5 billion to mitigate the impact of the counter tariffs. That is, for every dollar of tariff collected, 56 cents are remitted back to the importer, which is quite a generous relief program.
But it is hard to figure out how exactly Finance Canada uses the remission and relief program to close the gap between the two import values. The relief program is based on certain conditions, for example the import usage and the importers’ industry (e.g. manufacturing companies are automatically qualified). It is hard to get a direct conversion to the CAD 8.5 billion discounted import value.
We contacted Finance Canada for further clarifications. As one would expect, they can’t walk us through their whole calculation. But the representative from Finance Canada was kind enough to provide us some vital cues. They gave us the breakdown of the import values subjected to each of the three tariff rates.
This round of retaliation comprises three tariff levels—15%, 25% and 50%. As disclosed to us by Finance Canada, their estimates of import values to be tariffed are:
- 15%: CAD 2.5 billion
- 25%: CAD 9 billion
- 50%: CAD 16.1 billion
And here we see where our CAD 36.1 billion figure differs from the official CAD 27.6 billion. Here is our breakdown from a simple sum of 2024 import values:
- 15%: CAD 2.5 billion
- 25%: CAD 9.2 billion
- 50%: CAD 24.4 billion
Which means the difference almost entirely stems from the 50% tariff bracket. So what products are in the 50% bracket? Here is a long list of them:
| HS | Category | CAD bn | Items | Share |
|---|---|---|---|---|
| 73 | Iron & steel articles | 6.51 | 111 | 26.6% |
| 72 | Iron & steel | 5.52 | 134 | 22.6% |
| 76 | Aluminium | 2.98 | 27 | 12.2% |
| 48 | Paper & paperboard | 2.21 | 13 | 9.1% |
| 39 | Plastics | 1.12 | 6 | 4.6% |
| 85 | Electrical machinery | 0.92 | 3 | 3.8% |
| 94 | Furniture, bedding & lighting | 0.89 | 18 | 3.7% |
| 33 | Cosmetics & essential oils | 0.87 | 5 | 3.6% |
| 74 | Copper | 0.53 | 4 | 2.2% |
| 95 | Toys, games & sports equipment | 0.42 | 5 | 1.7% |
| 19 | Cereal & bakery preparations | 0.37 | 11 | 1.5% |
| 35 | Glues & enzymes | 0.34 | 5 | 1.4% |
| 49 | Printed matter | 0.30 | 1 | 1.2% |
| 70 | Glass | 0.28 | 1 | 1.1% |
| 87 | Vehicles | 0.23 | 1 | 0.9% |
| 44 | Wood & charcoal | 0.18 | 15 | 0.7% |
| 84 | Machinery | 0.15 | 1 | 0.6% |
| 04 | Dairy produce & eggs | 0.14 | 17 | 0.6% |
| 57 | Carpets & floor coverings | 0.14 | 2 | 0.6% |
| 68 | Stone & plaster articles | 0.13 | 1 | 0.5% |
| 82 | Tools & cutlery | 0.08 | 3 | 0.3% |
| 62 | Apparel, not knitted | 0.06 | 18 | 0.2% |
| 61 | Apparel, knitted | 0.05 | 6 | 0.2% |
| 17 | Sugars & confectionery | 0.02 | 4 | 0.1% |
| 47 | Wood pulp | <0.01 | 1 | 0.0% |
| Total | 24.43 | 413 | 100.0% |
2024 Canadian imports from the US, CAD billions, by HS chapter. Source: Statistics Canada CIMT, country of origin, matched to the 629 tariff items on the counter-tariff list as revised 26 August 2026.
Basically, it is very heavy on iron, steel and aluminium and their products. And this is an interesting point. In the Spring Economic Update 2026, the government made a projection on how much the remission program in its tariff orders for steel and steel-derivative goods will cost it. Here are the values (the leftmost is fiscal year 2025-26 and the rightmost is 2030-31):
What interests us is not the absolute amount, as in April they didn’t foresee this phase of trade and they seemed to have used the then status quo as a basis for the projection. The really useful info here is the ratio between steel tariff revenue and remission. The ratio is a constant of 0.66, i.e. for each CAD of tariff collected, they assume they will remit 66 Canadian cents back to the importers.
What if we use this ratio and then assume the net-tariff-revenue-adjusted import value for all the steel related products to be 0.34 of the nominal value?
This will shrink the “import value” from CAD 12 billion to about CAD 4.1 billion. Applying this CAD 7.9 billion adjustment back to our CAD 36.1 billion import-value figure, we get CAD 28.2 billion! Not really hitting the bullseye, but remarkably close.
In conclusion, while we can’t be sure this is how Finance Canada adjusted its import value for this round of counter-tariffs, we should remember that the Canadian government’s “dollar for dollar” actually means “a dollar net-tariff-revenue-adjusted import value for a dollar of import value the US tariffed.”
And, now you know!
