With Canada-United States-Mexico Agreement (CUSMA) exemptions shielding most bilateral trade, “most U.S. tariff revenue collected on imports from Canada this year have come from product-specific (section 232) tariffs, imposed on autos, metals, and softwood lumber,” write report authors and RBC economists Claire Fan and Annie Zheng. “This has created a fragmented Canadian economy where a subset of sectors faces a significant trade shock, while most other exports continue to enter the U.S. duty free,” they said.
