The series of international trade announcements in the escalating global trade war spurred by import tariffs imposed by the United States of America (U.S.) over the past several weeks can be dizzying. However, given the potential impact of the chaotic array of tariffs, suspended tariffs, reciprocal tariffs, and surtaxes now in place between the U.S. and Canada and the uncertainty surrounding their duration, it is imperative for businesses on both sides of the border to stay on top of the latest developments.
As of July 1, 2025, the following measures related to trade between Canada and the U.S. have been put in place:
- Effective March 4, 2025, the U.S. has imposed a 25% tariff on imports from Canada and Mexico that are not covered under the provisions of the Canada-United States-Mexico Agreement (CUSMA). A lower tariff rate of 10% applies to energy and potash resources from Canada.
- Effective March 4, 2025, Canada enacted a 25% surtax on specified goods imported from the United States (pursuant to CUSMA country of origin marking regulations). Totaling approximately $30 billion worth of goods (1,256 items), the specified items are listed by tariff code and description here: Products from the United States subject to 25% tariffs | March 4, 2025
- Effective March 12, 2025, Canadian steel and aluminum exports to the U.S., including many derivative products, are subject to a 25% tariff.
- Effective March 13, 2025, Canada has imposed a 25% reciprocal tariff on a further list of goods imported from the U.S., including steel and aluminum products, as well as certain tools, computer technology, sports equipment, and cast-iron products. Totaling $29.8 billion in value, the wide-ranging list of items, categorized by tariff code and description, can be found here: Products from the United States subject to 25% tariffs | March 13, 2025
- Effective April 3, 2025, the U.S. has imposed a 25% tariff on all imported passenger vehicles, including those made in Canada. However, importers under CUSMA (i.e., from Canada and Mexico) will be permitted to have this tariff calculated on the value of the non-U.S. content, subject to a certification process. For the time being, automobile parts imported in compliance with CUSMA will not be subject to the tariff, pending the establishment of a process to determine the extent of their non-U.S. content.
- Effective April 9, 2025, Canada has imposed a matching 25% tariff on passenger vehicles imported from the U.S. that are not compliant with CUSMA and the non-Canadian and non-Mexican content of any vehicles imported from the U.S. under CUSMA. Auto parts and imports from Mexico will not be affected by this retaliatory measure.
- Effective May 3, 2025, the U.S. has imposed a 25% tariff on automobile parts, subject to an exception for most CUSMA-compliant auto parts.
- Effective June 4, 2025, the U.S. has raised its tariffs on steel and aluminum (implemented on March 4) from 25% to 50%.
- Effective June 27, 2025, Canada has imposed a tariff rate quota of 2.6 million tonnes on steel mill products imported from non-free trade agreement partner countries. As a result, a 50% surtax will apply to steel imports above 2024 levels from those countries. The new quota and tariff, which will be reviewed in 30 days, is intended to protect the Canadian steel industry from product being diverted from the U.S. market due to the imposition of tariffs.
Exceptions and Potential Relief
There are several exceptions to the surtax imposed by Canada on imports from the U.S., such as goods made in the U.S. and repaired or altered in Canada. Further details on these exceptions and how the surtax will be administered by the Canada Border Services Agency on both commercial and personal imports of goods originating in the U.S. can be found at: United States Surtax Order (2025-1) and United States Surtax Order (Steel and Aluminum 2025).
Surtax relief may also be available through Canada’s Duties Relief and Drawback Programs, subject to the provisions of CUSMA.
Under the Duties Relief Program, qualified companies may import commercial goods without paying duties, provided those goods are eventually exported. Companies can only manufacture or use the commercial goods in a limited manner before export.
The Drawback Program helps Canadian companies compete in export markets by removing the impact of domestic duty from their commercial goods. This program grants a drawback (i.e., refund) of duties paid on imported goods if the goods are eventually exported in the same condition or consumed or expended during the manufacture of goods that will eventually be exported.
Tariff relief may also be sought through a remission order request, which may be considered when goods to be used as inputs cannot be sourced domestically or reasonably from a non-U.S. origin, or there are exceptional circumstances that could significantly damage the Canadian economy.
On April 15, 2025, the Government of Canada announced two duty remission programs to provide certain Canadian businesses relief from its imposed countermeasures (retaliatory tariffs and surcharges). Under one program, automakers will be permitted to import a specified number of CUSMA-compliant vehicles assembled in the U.S., free of Canada’s surtaxes (through the remission process), if they continue to manufacture vehicles and maintain their investments in Canada.
A second program will provide six months of surtax relief on imports from the U.S. to a wide range of Canadian organizations, including manufacturers, food and beverage processors and packagers, and entities involved in providing public healthcare, safety, and security. See Canada announces new support for Canadian businesses affected by U.S. tariffs for further information on these measures.
Various government funding and support programs, including sector-specific financial support that is expected to be announced, can also be leveraged by businesses to help mitigate the impact of U.S. tariffs and the Canadian countermeasures. Please see Canada Unveils New Tariff Relief for recently announced federal programs.
For additional information on how to temper the impact of recent Canada-U.S. trade measures, please see Tempering Tariff Turmoil.
Further Information
The countermeasures announced by Canada are scheduled to remain in effect until the new tariffs imposed by the U.S. are eliminated, with the renegotiation of CUSMA and Canada’s broader trade relationship with its neighbour to the south a distinct possibility in the near term.
Further details on the Government of Canada’s response can be found at: Canada's response to U.S. tariffs on Canadian goods.
Dozens of countries around the world are considering retaliatory trade measures in response to the latest round of U.S. tariffs, creating a fluid, unpredictable state of global trade and a high level of economic uncertainty for many jurisdictions. Ryan continues to monitor the situation closely and will provide further updates as new information becomes available.
If you have any questions or concerns about the potential impact of these developments on your organization, please contact the Ryan Customs Duty team.
Maureen Gilfoy
Director, Customs Duty
maureen.gilfoy@ryan.com
Sebastian Drozdziewicz CCS
Senior Manager, Customs Duty
sebastian.drozdziewicz@ryan.com
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