10% Surtax on U.S. Aluminum Imports

Summary#

The United States Surtax Order (Aluminum 2020) imposes a 10% surtax on certain aluminum and aluminum-containing goods imported from the United States. The surtax took effect on September 16, 2020 and covers about $3.6 billion in annual imports.

What it does#

• Applies a 10% surtax to goods from the United States that fall under a list of 44 specific tariff codes (the Canada Gazette lists those codes).
• The surtax is charged on the import's value for duty as set out in the Customs Act.
• It only applies to goods that “originate in the United States” as defined by the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.
• The surtax does not apply to U.S. goods that were already in transit to Canada on the day the measure came into force.
• The surtax stays in place until the United States removes its tariffs on Canadian aluminum.

Who's affected#

• Importers who bring the listed aluminum and aluminum-containing goods into Canada.
• Canadian manufacturers that use imported aluminum as an input — they may face higher material costs.
• Small businesses that import affected goods or buy goods from suppliers who import them.
• Consumers could see higher prices if importers pass on the added cost.
• The Canada Border Services Agency will administer and collect the surtax.
• It is not entirely unclear which specific finished products will see the biggest impact without looking up the tariff codes listed in the Gazette; the order lists the exact codes.

Why it matters#

• The surtax raises the price of affected U.S. aluminum imports by 10%, which can increase costs for businesses that use those inputs and for end consumers.
• The measure is a targeted, retaliatory step meant to pressure the United States to lift its own tariffs on Canadian aluminum.
• It touches an integrated North American market; Canada’s primary aluminum sector supports about 10,000 direct jobs, so these measures are part of broader trade and job protection choices.