For six months in 2025, Canada imposed counter‑tariffs on a wide range of goods from the United States. This short and well‑defined episode offers a unique opportunity to examine how Canadian retailers adjust prices in response to tariffs—and how retailers’ expectations and transparency with consumers affect pricing decisions.

In March 2025, Canada imposed counter-tariffs of 25% on a broad range of goods imported from the United States. These goods ranged from grocery products, appliances, electronics and furniture to household items. Then, six months later, Canada lifted most of these counter-tariffs.

Accurately measuring when and by how much tariffs impact retail prices is generally not easy. But the 2025 experience provides a distinct period to study pass-through and pricing behaviour.

We analyze a large dataset of online retail prices and find that prices for goods that were subject to counter-tariffs increased by about 6% more than those of non-tariffed goods. These relative prices returned to their pre-tariff level about three months after the counter-tariffs were removed.

We also find that retailers’ pricing decisions depended on how long they expected counter-tariffs to persist and whether retailers explicitly identified for their customers the reason behind the price increase.

About one-quarter of the counter-tariff rate showed up in retail prices

To conduct this analysis, we examine prices from seven major Canadian retailers that have multiple brick-and-mortar stores as well as online storefronts. We track these retailers’ daily online prices of more than 110,000 products between February and December 2025. Artificial intelligence tools help us classify products by country of origin based on information available on retailers’ websites and other online sources. These tools also help us identify US products subject to the Canadian counter-tariffs. To estimate the effects of counter-tariffs, we compare price changes for tariffed US products against price changes in a control group composed of goods produced domestically and in non-tariffed categories.

Our results show that prices of tariffed products rose gradually after March 4, 2025—when Canada first imposed counter-tariffs on some US products (Chart 1). By mid-June 2025, these prices stood about 6% above those of the control group—or roughly one-quarter of the 25% counter-tariff.