25% Surtax on U.S. Steel and Aluminum

Summary#

The United States Surtax Order (Steel and Aluminum 2025) sets a 25% surtax on certain goods coming from the United States. It targets about $29.8 billion of imports and comes into force on March 13, 2025.

What it does#

• Imposes a 25% surtax on goods that both originate in the United States and are listed in the order’s three schedules (steel, aluminum/other goods, and certain Chapter 98/99 items).
• The surtax is charged on the customs value of the imported goods and is added on top of any existing duties.
• The surtax does not apply to U.S. goods already in transit to Canada on the day the order takes effect.
• Some goods usually covered by Chapters 98 and 99 of the tariff are excluded from the surtax, except for steel goods (steel in Chapters 98/99 remains subject to the surtax).
• The measure is a direct response to U.S. tariff changes that took effect on March 12, 2025, and will stay in place until the U.S. removes its tariffs.
• A government remission (relief) process is available for importers in exceptional cases.

Who's affected#

• Canadian businesses that import the listed steel, aluminum and related goods from the United States.
• Downstream manufacturers in Canada that use U.S. steel or aluminum as inputs. They may face higher input costs or supply changes.
• Canadian steel and aluminum producers, who may benefit from reduced competition from U.S. imports.
• U.S. exporters to Canada of the listed products.
• The Canada Border Services Agency (CBSA) will administer the surtax at the border.
• The Department of Finance and federal trade officials, who designed and announced the measure.

Why it matters#

• The surtax is intended to push the U.S. to remove its tariffs on Canadian steel and aluminum by making U.S. goods more expensive in Canada.
• It can raise costs for some Canadian manufacturers and consumers if importers pass the surtax on through prices.
• It aims to protect Canadian steel and aluminum jobs and support domestic supply chains.
• The remission process may reduce hardship for importers with exceptional needs, but most affected businesses will face higher import costs while the surtax is in place.