Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Tariff Revenue Hits Record as Canada nears U.S. Trade Deadline
Trade and Tariffs| July 10, 2025
Image: Freepik/rawpixel.com
U.S. Tariff Revenue Soars to $100 Billion as Canada Faces July 21 Trade Deadline
As of July 8, 2025, Reuters reports that the U.S. has collected about $100 billion in tariff revenues in 2025, and according to U.S. Treasury Secretary Scott Bessent, tariff revenue projections could reach $300 billion by the end of this year.
See: U.S. Tax Bill Could Drive Capital Back to Canada
Customs duties in May alone reached $22.8 billion or almost 4x the amount one year prior. While the White House views this revenue as a fiscal benefit, economists caution that tariffs create economic distortions, raise costs for importers, and increase prices for consumers.
Revenue Claims Fact Check
FactCheck.org analyzed Treasury data and found that U.S. customs and tariffs generated $37.8 billion in April and May combined, with $22.2 billion in May alone, which is well below the $88 billion those months were referenced to yield, let alone the larger $122 billion claimed later. It highlights how public statements about tariff income often exceed actual collections.
Canada’s Export Decline and Digital Services Tax Dropped
The Business Council of Canada reports that Canadian exports to the U.S. dropped 26.5% year-over-year, with Canada's share of exports to the U.S. falling from 78% to 68%.
Export volumes fell 10.8% in April before seeing a small 1.1% rebound in May but remain historically low. The Business Council of Canada warned that this declines is another “wake-up call” with advocates pushing to diversify trade into Southeast Asia, and move ahead with the One Canadian Economy Act .
Canada’s proposed 3% digital services tax was supposed to raise C$7.2 billion over five years but was dropped by PM Carney late June after it triggered the suspension of trade talks .
According to The Guardian, Nobel laureate economist Joseph Stiglitz warned that Canada's repeal represents “a troubling precedent for economic sovereignty,” describing it as a resignation to U.S. economic coercion instead of a strategic trade policy.
New Round of U.S. Tariffs Skips Canada for Now
On July 7, Trump issued letters announcing tariffs between 25–40% to start August 1 on imports from 14 countries, including South Korea and Japan. Canada wasn't included on this list but is still subject to existing 25% tariffs on steel, aluminum, and autos, along with 10% U.S. duties on energy and potash not covered by CUSMA. Copper tariffs are also in Trump's sights which is another concern. The S&P 500 fell nearly 1%, it's largest global drop in weeks following the tariff letter announcement.
Fintech Feeling the Strain
Tariff uncertainty is directly affecting Canadian fintechs. Cross-border payment providers are facing higher Foreign Exchange (FX) costs and more regulatory complexity.
See: DPI Digital Finance Works. Why Is Canada Still Waiting?
Trade finance platforms have warned that rising tariff uncertainty is leading to higher invoice default rates among SME exporters and creating pressure on fintech services who need predictable trade flows.
According to PYMTS, many fintechs are accelerating adoption of tokenized receivables and embedded credit insurance tools to help manage risk, speed up funding, and reduce exposure to trade disruption.
“Tokenization… offers the potential to streamline the inefficient $9.7 trillion trade finance market.”
What Comes Next
Canada and the U.S. are negotiating a new security and economic partnership with a July 21 target date but without consequences for missing the deadline, extended talks will cause further economic harm. And if there is no deal, Canada could move forward with retaliatory tariffs while providing targeted relief, which could include SME and export-orientated fintechs.
See: The Crisis Canada and Fintech Can’t Afford to Waste
Looking to diversify and reduce reliance on U.S. markets, Canada is moving quickly to finalize a free trade agreement with Southeast Asian nations. Foreign Minister Anita Anand confirmed that “work is being done with alacrity to finalise the text of the free trade agreement” with ASEAN, adding that economic cooperation will also include energy, food security, digital economy, and artificial intelligence.
Outlook
The July 21 deadline will impact Canada’s exports and redefine trade, innovation, and the financial ecosystem, as it impacts geopolitical volatility, SME access to financing, and investor perceptions. This is a decisive moment for Canada’s economic resilience and fintech innovation.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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