US tariffs ruling seen having limited impact on Canada

Friday’s United States Supreme Court ruling on tariffs leaves Canada largely unaffected as sector-specific duties remain in place, St. Louis-based investment bank Edward Jones says.

The Supreme Court struck down the U.S. administration’s sweeping global tariffs by a vote of six to three, eliminating duties that had generated an estimated $175 billion in revenue as a main plank in President Donald Trump’s agenda.

“The court ruled that the president had exceeded his authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose tariffs across the globe,” Edward Jones Investment Strategist Mona Mahajan said in a note. “For Canada, the more relevant tariffs imposed by the U.S. are the Section 232 tariffs, not the IEEPA-based tariffs that have been struck down.”

The ruling is expected to have limited direct impact on Canada because the more consequential U.S. trade measures remain intact. Canada is still subject to Section 232 tariffs: 25% on steel and 10% on aluminum, which were unaffected by the Supreme Court ruling. And Canadian exports compliant with the Canada-United States-Mexico Agreement are expected to remain exempt.

CUSMA

Despite the new measure, “In our view, any CUSMA-compliant goods will remain exempt from this new tariff as well,” Mahajan said.

“Perhaps more important for the Canadian economy will be the renewal of talks around CUSMA, which remain on track to occur in July,” the strategist said. Canada is seeking “stable and tariff-free trade conditions” while advancing priorities such as digital trade and protecting key sectors including autos, agriculture and cross-border supply chains.

Trump has already moved to replace the repealed tariffs, announcing a new blanket measure of 15% on all trading partners, including Canada, under Section 122 of the Trade Act of 1974, Mahajan said. These tariffs can be imposed without investigation but are limited to 150 days unless extended by Congress.

Washington will also likely investigate broader measures under Section 301 and Section 232, Mahajan said. These allow tariffs tied to unfair trade practices or national security concerns, though both require formal reviews before implementation.

Refunds?

Of concern to U.S. businesses, the court didn’t address whether importers are entitled to refunds, leaving that issue to lower courts and likely future litigation, Mahajan said.

The repealed IEEPA tariffs had accounted for roughly 60% of current U.S. import duties, and their removal would reduce the effective tariff rate from about 17% to 9.1%, still elevated by historical standards.

From a market perspective, the decision removes a key overhang, the strategist said.

“Overall, investors may be breathing a bit of a sigh of relief that the Supreme Court decision has come in as expected, and that the administration has also reacted in line with expectations,” she said.

The broader economic backdrop remains intact despite ongoing trade uncertainty, she added.

“The good news is that we continue to see U.S. and Canadian economic growth that is positive and growing in line with trend levels, and corporate earnings that are on pace for strong double-digit growth in 2026.”