25% Surtax on China-Origin Goods

Summary#

The Order Amending the China Surtax Order (2024) (SOR/2026-33) changes how Canada applies a surtax to certain goods from China. It sets a 25% surtax on listed China-origin goods, clarifies how “origin” is decided, and includes exceptions; most of the order takes effect on March 1, 2026, with parts treated as in force from October 22, 2024.

What it does#

• Says that whether goods “originate in China” is decided using the Determination of Country of Origin for the Purpose of Marking Goods (Non-CUSMA Countries) Regulations.
• Says the order does not apply to goods that were in transit to Canada on October 22, 2024.
• Imposes a 25% surtax on goods that originate in China and are covered by tariff items listed in Schedule 2.
• Also applies the surtax to goods entered under Chapter 99 tariff items when those goods would otherwise fall into items in Schedule 2.
• Lists two main exceptions to the surtax:
  • goods temporarily imported for repair, or reimported after being exported for repair; and
  • goods entered under Chapter 98 tariff items (even if they would otherwise match Schedule 2).
• Repeals Schedule 1 and updates wording/references in Schedule 2 (the notice does not list the actual tariff lines in Schedule 2).
• Comes into force on March 1, 2026 (or on registration day if registered later). Sections dealing with the transit exemption and one Schedule change are treated as having come into force on October 22, 2024.

Who's affected#

• Importers and exporters who trade goods with China, especially businesses whose products match the tariff items in Schedule 2 (the Gazette notice does not list those items, so affected product lines are not specified here).
• Customs brokers, freight forwarders and logistics companies that clear China-origin shipments.
• Manufacturers and retailers who rely on parts or finished goods from China — they may face higher import costs for the affected items.
• Consumers may be indirectly affected if businesses pass higher import costs on in prices.
• Goods that were in transit to Canada on October 22, 2024 are not subject to the surtax.

Why it matters#

• A 25% surtax is a large added cost on imports for the goods covered. That can raise the price of affected products or inputs.
• The change clarifies how origin is determined, which affects whether particular shipments are caught by the surtax.
• The rule includes limited exceptions (repairs, Chapter 98 entries, and goods in transit on October 22, 2024), which matters for firms with those specific arrangements.
• Some parts are backdated to October 22, 2024, which could affect shipments or accounting for that period.
• The notice refers to a Regulatory Impact Analysis Statement elsewhere; this summary does not include that analysis and does not list the specific tariff lines in Schedule 2, so you may need to check the full Gazette entry or a customs specialist to see if a particular product is covered.