Invest in Hamilton

On April 4th, 2025, the United States Department of Commerce announced that it would increase tariffs on Canadian softwood lumber from 14.4% to 34.45%. Reporting from CTV News notes that the United States imports approximately 30% of its softwood lumber, but that 80% of those imports come from Canada – predominantly British Columbia.

The following day, April 5th, 2025, saw the initiation of a near-global 10% tariff on international goods exported into the United States. Neither Canada nor Mexico were impacted by this new tariff.

On April 8th, 2025 the United States Administration applied an additional 50% tariff on China. Following four days of market declines, April 8th also saw the S&P 500 report a loss of $5.83 trillion. Reuters News reports this as the steepest loss since the index was created in the 1950s.

Despite previous statements from the U.S. Administration that the per-country application of reciprocal tariffs would come into effect on April 9th, 2025, a sudden policy change on that day halted this expected measure.

With the exception of China, all countries identified during the White House Rose Garden economic announcement of April 2th, 2025, received a 90-day reprieve on the application of reciprocal tariffs. It is important to note that the 10% baseline tariff announced on April 2nd, 2025 remains in force.

It was further clarified by White House officials that these 10% baseline tariffs would not apply to Mexico and Canada. A series of tariff announcements culminated on April 10th, 2025, with the White House announcing that China would be subject to 145% tariffs. On the morning of April 11th, 2025, the Government of China responded with an increased retaliatory tariff of 125% on American-made imports.

Canada’s next major trade milestone continues to be May 3rd, 2025. On that day, the United States is expected to expand tariffs to automobile parts. As reported last week, the Conference Board of Canada projects that a single quarter of automotive tariffs could reduce automobile and parts exports from Canada by more than half.

Working from Statistics Canada’s definition of the automotive sector, Hamilton Economic Development estimates there are 11 companies without employees and 25 companies with employees operating in Hamilton’s automotive sector. The majority of the jobs found within this sector are in vehicle parts manufacturing, which reflects an estimated 1,860 jobs. Additional data from Lightcast.io estimates that the local export value (combined foreign and domestic) of goods and services produced in the vehicle parts manufacturing sector, alone, is approximately $855,994,498 – based on 2022 input/output data from Statistics Canada.

Economic modelling from the Conference Board of Canada notes that Hamilton would be the fourth most impacted Canadian census metropolitan area in terms of GDP decline in a scenario where tariffs were applied for three months. Specifically, this model forecasts a 1.6% decline in regional GDP over Q2 2025.

A suite of programs and services are available to provide support to Canadian businesses during this time.

• On April 15, 2025, Innovation Factory is hosting a discussion with Sue Rauth of the Federal Trade Commissioner Service on navigating the impacts of U.S. tariffs. Registration is available through this link.
• Export Development Canada’s Trade Impact Program is mobilizing $5 billion over two years to help exporters reach new markets for Canadian products.
• Business Development Bank of Canada is making $500 million in favourably priced loans available to support impacted businesses in sectors directly targeted by tariffs and companies in their supply chains.
• $1 billion in new financing is available through Farm Credit Canada to reduce financial barriers for the Canadian agriculture and food industry.
• Temporary flexibilities have been added to the Employment Insurance Work Sharing Program, which helps avoid layoffs when there is a temporary decrease in business activity.
• The Canada Small Business Financing Program is offering a maximum loan of $1.15 million to small businesses and start-ups in Canada with revenue of less than $10 million.

And most relevant for Hamilton’s manufacturing sector, the Government of Canada has created a tariff remission request program to provide support on Canadian counter tariffs where a manufacturing company can not source inputs through domestic markets.

For companies seeking to diversify their trade relationships, consider meeting with a member of the Federal Trade Commissioner Service. The Trade Commissioner Service can help Canadian companies access Canada’s 15 free trade agreements with 51 countries worldwide. As is ever the case, please feel free to connect with Economic Development staff, who can offer a first point of introduction to the Trade Commissioner Service.