After a brief reprieve for the past 30 days, the United States has imposed a 25% tariff on imports from Canada and Mexico. Energy resources from Canada are subject to a lower tariff rate of 10%. As a countermeasure, the Government of Canada has enacted a 25% surtax on specified goods imported into Canada from the United States. Both the United States tariffs and Canadian surtax took effect on March 4, 2025.
The Government of Canada previously released a list of $30 billion worth of goods (1,256 items) originating from the United States (pursuant to the Canada-United States-Mexico Agreement (CUSMA) marking regulations) subject to the retaliatory surtax. This list, categorized by tariff item and description, is available on the Government of Canada’s website.
Surtax Exceptions
There are several exceptions to the surtax, including the following:
- Goods classified, or that should be classified, in Chapter 98 of the Schedule to the Customs Tariff, except for classification 9804.30, 98.25, 98.26, 9897.00.00, 9898.00.00, and 9899.00.00
- Goods that may be classified in tariff items of Chapter 99, with the exception of goods classified in tariff items 9966.00.00, 9971.00.00, and 9989.00.00 (the latter being subject to the surtax even though they are normally entitled to the Most-Favored-Nation zero customs duty rate)
- United States goods that are in transit to Canada on the day on which the surtax comes into force (March 4, 2025)
- Goods classified under heading 40.11 that are for use as original equipment in the production of any vehicle, machine, or appliance referred to under that heading (which includes original equipment manufacturer (OEM) tires, but not after-market tires)
- Returning goods that are made in the United States, previously imported into Canada, and duty-paid
- Goods made in the United States and repaired or altered across the border
Read further details on the surtax to be administered by the Canada Border Services Agency on both commercial and personal imports of goods originating in the United States.
Potential Relief
Canada’s Duties Relief and Duty Drawback Programs remain available for relief from Canadian duty, subject to the provisions of CUSMA.
Under the Duties Relief Program, qualified companies may import commercial goods without paying duties, as long as those goods are eventually exported. Companies can 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 (refund) of duties paid on imported goods if the goods are either:
- Eventually exported in the same condition
- Consumed or expended through a manufacturing process for goods eventually exported
Further Information
The countermeasures announced by Canada are scheduled to remain in effect until the new tariffs imposed by the United States are eliminated. In addition, several Canadian provinces have announced specific trade measures in reaction to United States tariffs. Retaliatory tariff increases have also been threatened by the United States in response to the Canadian countermeasures. Ryan continues to monitor the situation closely and will provide further updates as new information becomes available.
Our team can help your organization implement strategies to minimize the potential impact of the escalating trade measures on your operations and supply chains. 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
Senior Manager, Customs Duty
sebastian.drozdziewicz@ryan.com
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- Customs Duty
- Federal