MFN Tariff Withdrawn for Russia, Belarus

Summary#

The federal government issued the Most-Favoured-Nation Tariff Withdrawal Order (2022-1) to remove Most-Favoured-Nation (MFN) tariff treatment for goods from Belarus and Russia. That change makes most such imports subject to the General Tariff of 35%, and it came into force when the order was registered on March 2, 2022; it will end automatically after 180 days unless Parliament approves it.

What it does#

• Withdraws MFN tariff entitlement for goods that originate in Belarus and goods that originate in Russia.
• In practice, most affected imports will face the General Tariff rate of 35%, unless their current MFN rate is already higher.
• Goods that were already in transit to Canada on or before the day the order came into force remain exempt.
• The Order came into force on registration (March 2, 2022) and will cease to have effect after 180 days unless approved by both Houses of Parliament.
• The Canada Border Services Agency will adjust its systems and apply the new tariff treatment as part of routine customs administration.

Who's affected#

• Importers and Canadian businesses that buy goods from Russia or Belarus.
• Retailers, wholesalers, manufacturers, and supply-chain service providers (freight carriers, customs brokers) handling those imports.
• Consumers who buy products that have no easy substitute; they may face higher prices or lose access to particular brands.
• Based on 2021 trade data, the measure would affect about $2.1 billion in annual imports from Russia and $33 million from Belarus.
• The Department of Finance and Canada Border Services Agency are the federal bodies named in the order; no public consultations were held because the government treated the action as urgent.

Why it matters#

• The tariff increase is designed to raise the cost of importing from Russia and Belarus and is part of Canada’s economic response to Russia’s invasion of Ukraine.
• Higher duties are likely to push importers to find other suppliers or domestic sources, reducing trade with those two countries over time.
• For Canadians, the most direct effects could be higher prices for some goods or temporary unavailability of specific brands or items that are uniquely sourced from Russia or Belarus.
• The change is temporary unless Parliament extends or approves it, so businesses and consumers may see further action depending on political or diplomatic developments.