Canada’s retaliatory tariffs of 15 percent, 25 percent or 50 percent are targeting a wide range of industries including steel, railway construction materials, frozen and fresh fish, dairy, electronics, as well consumer goods like dishwashers and washing machines. Several categories of beauty products will be subject to a 50% tariff, including perfumes and toilet waters, lip and eye makeup, hair care preparations and manicure and pedicure products.
The retaliatory tariffs match US levels, said Canada’s Finance Minister Francois-Philippe Champagne. Ottawa’s retaliation will take effect September 8, a timeframe earlier outlined by Prime Minister Mark Carney after US President Donald Trump’s 50-percent duties came into place on Saturday, August 22. Several cosmetic categories are also covered by these new U.S. tariffs..
French language
Carney decided on Friday, August 21, to suspend trade negotiations with the United States, rejecting what Ottawa described as "unfair" conditions sought by the White House. In response, Washington began imposing new tariffs on Saturday on US$20 billion worth of Canadian imports, including cement, alcohol, honey and agricultural products, as well as certain color cosmetics, perfumes, fashion items and even hockey sticks.
The Canadian Prime Minister’s move carries risks for the country’s economy, which had been recovering after slipping into a technical recession in the first quarter. However, his decision enjoys broad public support, with 76% of Canadians backing the suspension of trade negotiations, according to a poll published this weekend.
The Canadian government said US officials made unacceptable "threats" to the French language and "Quebec culture" too, he added, referring to eastern Canada’s French-speaking province. According to Ottawa, the proposed agreement would have weakened protections for French-language online media and undermined Canada’s requirement for bilingual labeling on products sold in the country.
Integrated supply chains
For cosmetics, the potential impact on businesses on both sides of the border could be significant, given how deeply integrated the two markets have become. Until now, products had moved freely under the US-Mexico-Canada free trade agreement.
“Canada is the largest export market for the U.S. cosmetics and personal care products industry, accounting for $4.2 billion in annual exports and more than one-quarter of all U.S. industry exports. The close commercial relationship between our two countries supports manufacturing, investment, and jobs across North America," said Heather Helm, Executive Vice President for Global Strategies at the Personal Care Products Council (PCPC), in a statement.
The exchanges drew some concern in the United States. Ethan Johnson, 25, who runs a start-up, told AFP: "The economics and the math behind it do not make sense." But 29-year-old electrician Lucas Feser trusts the Trump administration "to set up a harder, better deal."
According to PCPC, the U.S. maintains a $1.9 billion trade surplus in finished cosmetic and personal care products with Canada.
