Exemptions to U.S. surtax orders

Summary#

This Order amends the United States Surtax Order (2025-1) and the United States Surtax Order (Steel and Aluminum 2025) to add narrow exemptions to the surtaxes Canada applied in response to recent U.S. tariffs. The changes take effect on April 9, 2025 (or on the day the Order is registered if that is later).

What it does#

• Fixes a wording point in the French text of the United States Surtax Order (2025-1) about certain rubber goods used as original equipment parts.
• Exempts certain poultry and egg products from the surtax under the Import for Re-Export Program (IREP) when a permit specifically allows their import for processing and re-export. This keeps those inputs duty-free under the IREP.
• Exempts personal or household goods bought in the United States and brought into Canada by residents of Campobello Island if:
  • the person normally lives on the island,
  • they return after an absence of less than 24 hours,
  • the goods are in their possession or baggage and are for personal or household use.
• Applies the Campobello Island exemption to both surtax orders (the general surtax order and the steel and aluminum surtax order).
• Confirms the measures mirror Canada’s response to U.S. actions (including U.S. tariffs of 25% and, briefly, 10%) and will be administered by the Canada Border Services Agency (CBSA).

Who's affected#

• Canadian food processors that use duty‑free imports under IREP (these processors should still be able to import eligible poultry and egg inputs without the surtax).
• Residents of Campobello Island (about 1 000 people) who regularly buy groceries and household items in the United States and cross back into Canada by road.
• Importers and exporters involved in the broader tariff measures — the original surtax orders targeted roughly $30 billion and $29.8 billion in annual U.S. imports, so businesses trading in those goods remain affected except where exemptions apply.
• The Canada Border Services Agency, which will apply and communicate the exemptions.

Why it matters#

• It keeps a key duty‑free supply route open for Canadian food processors so their costs and export competitiveness are not unintentionally hurt.
• It prevents immediate price increases and practical hardship for island residents who depend on quick trips to the U.S. for daily needs because their island is most easily reached through the United States.
• It shows Canada is keeping reciprocal trade measures in place in response to U.S. tariffs while making targeted tweaks to avoid harming specific communities and industries.