Tariff Update – September 2025

Electro-Federation Canada (EFC), in collaboration with our Wire & Cable and Transformer Business Sections and with support from Sussex Strategy Group, is actively engaging with the federal government on critical trade issues affecting our industry. These efforts focus on two fronts:

1. Extending import quotas beyond raw materials to include finished goods such as wire, cable, and transformers.
2. Securing supports for Canadian firms impacted by escalating U.S. tariffs on steel, aluminum, copper, and related products.

U.S. Tariffs – Escalation in August 2025

Canada and the United States did not reach an agreement in principle by the August 1, 2025, deadline. This failure to secure a deal has had significant consequences:

• Tariff Increases: The U.S. raised tariffs on non-CUSMA compliant goods from 25% to 35%, effective immediately.
• Section 232 Duties: Steel and aluminum products now face a 50% tariff, even when CUSMA-compliant. This directly impacts Canadian-made transformers and other products that rely on these inputs.
• Expanded Coverage: On August 18, 2025, the U.S. broadened Section 232 tariffs to an additional 407 HS codes, targeting steel and aluminum derivatives. These include transformers, wind turbines, heavy equipment, and other industrial goods. The new duties apply to goods entered or withdrawn for consumption after 12:01 a.m. ET on that date.

The intended purpose of an agreement in principle was to stabilize bilateral trade ahead of CUSMA renegotiations. While the U.S. has reached such agreements with the UK, Japan, and South Korea, Canada remains without one. Mexico received a 90-day extension but continues to face tariffs in the meantime.

Canadian Measures

In response, Canada has implemented its own set of tariffs and quotas designed to protect domestic producers from dumping and diversionary flows caused by U.S. trade actions.

• Tariff Rate Quotas (TRQs): Effective August 1, certain steel products are subject to a 50% tariff once quotas are exceeded.
• Melt-and-Pour / Smelt-and-Cast Rules: Effective July 31, a 25% tariff applies to products containing Chinese-origin steel or aluminum. Proof of origin is required, and beginning September 22, only official certificates of origin will be accepted.

Member Priorities

Wire & Cable Section

Members are urging the federal government to extend quotas to include copper and finished wire and cable products. Without such measures, Canada risks becoming a dumping ground for below-cost goods diverted from the U.S. market.

Transformer Section

Members are facing rising U.S. tariffs that threaten to cut off access to the U.S. market. Options under discussion with government officials include:

• Financial support programs through EDC or other federal channels to offset tariff-related costs.
• Immediate tax credits to strengthen domestic supply chains and competitiveness.

Consultations

Finance Canada has launched consultations to assess whether certain imported products subject to U.S. and Chinese tariffs are already produced in Canada. EFC circulated this information to our Business Sections, encouraging Canadian manufacturers to participate and identify domestic capacity.

Government Supports

Recognizing the challenges posed by these trade measures, the Government of Canada has made a range of programs available to affected firms, including:

• Regional Tariff Response Initiative (RTRI) and Large Enterprise Tariff Loan Facility (LETL).
• BDC Pivot to Grow loans for small and medium-sized enterprises.
• Tax relief measures, such as U.S. surtax remission and deferrals.
• Duties Relief and Duty Drawback programs to support exporters.
• Work-Sharing Program to help businesses retain skilled workers.

For additional details, members are encouraged to consult the Government of Canada’s tariff support programs or connect with a Trade Commissioner for tailored guidance.

What Members Can Do Now

EFC members can take several steps to help navigate and respond to the evolving tariff landscape:

• Participate in consultations: Share information with Finance Canada on domestic manufacturing capabilities to influence tariff exemptions.
• Apply for government supports: Explore available financing, loan, and tax relief programs to offset tariff impacts.
• Stay engaged with EFC: Provide feedback on how tariffs are affecting your business so we can advocate effectively on your behalf.
• Monitor ongoing updates: Visit EFC’s Tariff Hub for the latest information, resources, and member guidance.

Moving Forward

• EFC will continue to press the federal government to:
• Secure a bilateral agreement with the U.S. to stabilize trade.
• Extend quotas to finished goods to protect Canadian manufacturers.
• Provide immediate financial supports to offset the impacts of tariffs on key sectors.

We will provide ongoing updates to members as this situation develops.

To keep members informed, EFC has created a centralized hub featuring the latest actions, advocacy efforts, and resources related to the ongoing tariff situation between Canada and the United States. Check back for updates, insights, and guidance to navigate evolving trade developments, industry impacts, and strategic responses. – View Tariff Update Hub