U.S. Tariff Rebate Program Falls Short for Canadian Exporters Facing Persistent Levies
After 10 years in operation, U.S. President Donald Trump’s trade war against Canada proved just too much for the small Toronto business.
Gelaine Santiago and partner Jérôme Gagnon-Voyer made the difficult decision to shutter their jewelry company, Cambio & Co, in January.
Now, even with a tariff refund system going live Monday following the Supreme Court striking down the levies in February, Gagnon-Voyer says, the damage is already done.
“The refund is a nice-to-have,” said Gagnon-Voyer. “But for us, at the end of the day, all the changes the U.S. did in 2025, the de-minimis, the tariffs, they don’t seem to end … They’ll find other ways against foreign-owned companies.”
Gagnon-Voyer told the Star that he has been working with a customs broker who confirmed their eligibility for the refund.
It could be more than $10,000, he said — funds he hopes will support their new consulting venture, Founding Possibilities, aimed at helping other Filipino diaspora entrepreneurs.
The Star spoke to Santiago last September when the White House ended the U.S. import duty exemption for goods valued at less than $800, known as the de-minimis policy.
At the time, Santiago was setting up a warehouse in New York state to shield U.S. customers from surprise duty bills, while paying a 19 per cent tariff to ship her products — Philippine-made accessories — across the border.
But overhead costs piled up, eventually making it unsustainable for the couple to continue running the company, a brand designed to help the Filipino diaspora connect with their heritage.
While the rebates may sound like welcome relief, they cannot undo the damage caused by U.S. tariffs, trade experts told the Star.
The refund system, they say, is not as good as it appears — benefiting only a small number of Canadian businesses while imposing a significant administrative burden.
Michelle Auger, the director of trade and marketplace competitiveness for the Canadian Federation of Independent Business, said the refund applies only to importers in the U.S. and will also apply to Canadian businesses if they list themselves as the importer of record.
According to a survey by the Canadian Federation of Independent Business, only 26 per cent of members whose products are not compliant with the Canada-United States-Mexico Agreement have registered as the importer of record, Auger said.
The tariffs remain in place for sectors such as steel and aluminum.
Auger said the refund system could be confusing for small businesses to navigate. They would need a U.S. customs account and a U.S. bank account, and may need to work with their customs brokers to get a refund.
“It is welcome news that there is a process for Canadian exporters to get maybe some of that money back,” she said. “But again, it’s not an easy system.”
Hashem Aboulhosn of Merchant Growth said that in many cases, U.S. importers eligible for refunds had passed on the cost increase to their Canadian clients or consumers.
Whether the refund will be shared will depend on negotiations between American importers and Canadian businesses, he said.
In some cases, carriers such as FedEx or UPS act as the importer on paper and would receive the refund from the government, even though the tariffs were paid by Canadian businesses. The process of recovering those funds could be lengthy, Aboulhosn added.
“I would imagine it’s gonna be a very slow and complex process if it all happens. So it’s probably best to prepare for the worst, or prepare to not really get a full refund,” he said.
John Boscariol, head of the international trade group at McCarthy Tétrault, said the rollout of refunds for the IEEPA tariffs struck down by the Superior Court does not mean Canadian businesses affected by other tariffs will see light at the end of the tunnel anytime soon.
The sectoral tariffs are harder to challenge in court and may only be resolved through the upcoming CUSMA negotiations, Boscariol said.
“I wouldn’t quite say we’re on the road to things turning better yet,” he said. “Because I do think the U.S. administration is just going to find other ways to impose tariffs and other obstacles to trade from Canada and its other trading partners.”
This article was first reported by The Star
