25% Surtax on U.S. Imports

Summary#

The federal government registered the United States Surtax Order (2025-1) under the Customs Tariff, applying a 25% surtax to many goods that originate in the United States. The Order came into force, or is treated as having come into force, on March 4, 2025 and was published in the Canada Gazette on March 12, 2025.

What it does#

• Imposes a 25% surtax on the value for duty of selected imported goods that are considered to originate in the United States under CUSMA marking rules.
• Targets a long list of tariff items (a large schedule of products). The government says this covers about $30 billion in U.S. goods based on 2023 trade figures.
• Does not apply to U.S. goods already in transit to Canada on March 4, 2025.
• Exempts certain items, including:
  • goods under heading 40.11 when used as original equipment in the production of vehicles, machines or appliances; and
  • goods that fall under tariff Chapters 98 or 99 that are not listed in the schedule.
• The surtax is charged in addition to any normal customs duty and is calculated on the “value for duty” as set out in the Customs Act.
• The Order is described as Canada’s reciprocal response to recent U.S. tariff actions; the government says surtaxes will stay in place until the U.S. removes its tariffs.
• The government intends to publish a remission (relief) process for exceptional cases and has opened a public comment process on potential further measures.

Who's affected#

• Importers, distributors and retailers who bring in the listed U.S. goods.
• Canadian consumers who buy affected finished goods (the list includes food items, appliances, cosmetics, furniture, apparel and more) — some price increases could be passed on to shoppers.
• Canadian manufacturers that use U.S. components or inputs covered by the surtax may face higher input costs.
• Sectors specifically mentioned by the government: food products, appliances, cosmetics, furniture, apparel, plastics, aftermarket tires, and pulp and paper.
• The Canada Border Services Agency (CBSA) will administer the surtaxes and issue guidance to importers.

Why it matters#

• This is a direct, targeted economic response by Canada to U.S. tariff measures. The stated aim is to put pressure on the U.S. to remove its tariffs and protect Canadian industries and jobs tied into North American supply chains.
• For everyday people, it could mean higher prices or fewer choices for some products if importers pass the surtax cost on or shift sourcing.
• For businesses, it could raise production costs for firms using affected U.S. inputs, or prompt them to find alternative suppliers.
• The government plans a remission process for exceptional hardship and a public comment period before any broader list of measures is finalized.