Upcoming Canada and U.S. tariff changes to watch for in 2024
Importers could see significant changes to tariffs made throughout 2024. Both the Canadian and U.S. governments appear ready to enact major shifts in the way tariffs and trade relations function in 2024 and beyond. As such, businesses could find themselves dealing with tariffs that impact their bottom line – for better or for worse.Some tariff changes will be the result of routine re-examinations of preferential tariff programs that define Canada’s trade relationships with developing countries. In the United States, the upcoming 2024 Presidential election has already motivated candidates to announce promises revolving around tariffs and trade with competing nations – most notably, China.
Regardless of the upcoming changes, importing businesses should stay on top of critical tariff adjustments that are likely to be announced over the next 12 months.
Canada tariff changes in 2024
One of the most significant changes to Canadian tariffs over the next 12 months will involve the potential creation of a General Preferential Tariff Plus (GPT+) program. Designed to align with Canadian environmental and labour rights initiatives, a GPT+ program would offer sharp reductions of tariffs on goods.
Foreign companies that achieve environmental and labour rights goals when producing goods could qualify for GPT+ on their exports. Canadian companies importing goods from GPT+ nations would benefit from lower costs, while the exporter would benefit from better opportunities for trade.
This new program would supplement existing GPT and Least Developed Country Tariff (LDCT) programs, both of which are also set to change in 2024. The Canadian government is in the process of collecting feedback for GPT and LDCT programs, with the aim of updating GPT eligibility and implementing transition periods for countries graduating out of the LDCT program. There’s a chance that GPT and LDCT programs could be reviewed every five years instead of once per decade.
Canada Customs also announced the release of Customs Notice 23-28, confirming various duty rate reductions that are scheduled according to individual Free Trade Agreements with different nations. With an upcoming election in 2024, tariffs are likely to become a political issue, such as the recent rejection of a Canada-Ukraine trade bill based on opposition to a carbon tax.
U.S. tariff changes in 2024
Potential tariff changes in the United States will likely revolve around politics in 2024. It’s an election year, and presidential candidates will seek to attract voters with promises of tariffs on goods imported into the U.S. A recent Reuters/Ipsos survey showed that 66% of respondents said they’re more likely to vote for someone who "supports additional tariffs on Chinese imports."
Current U.S. trade tariffs on Chinese goods started under a Republican administration and continue under the current Democratic Party administration. This shows the political popularity of tariffs, despite the potential costs to U.S. consumers.
Depending on the winner of the 2024 U.S. election, there could be a sharp rise in tariffs on goods from China and other nations. A universal baseline tariff could be established. Long-standing relationships, including China’s status as a most favoured nation for trade, could be significantly changed. Acts of Congress could give Presidents the power to impose reciprocal tariffs against nations with tariffs on U.S. goods.
The European Union recently announced the renewal of a tariff truce with the United States over the holiday season. This will continue the pause on retaliatory tariffs against about $6 billion of U.S. goods exported to EU nations until March 2025, impacting American products such as alcohol and vehicles.
It’s not a coincidence that the EU will revisit the tariffs after the next U.S. administration is sworn into office. There’s a good chance that 2024 will create a significant impact on tariff changes involving the U.S. and major trading partners.Tariff program changes in the Canada and the U.S. could impact the bottom line of your business. Let an experienced professional handle the details and help you adjust to a constantly changing economic landscape. Contact one of our customs brokers to learn more.
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