25% Surtax on Select U.S. Imports

Summary#

The United States Surtax Order (2025) imposes a 25% surtax on a long list of goods that originate in the United States. It took effect on February 4, 2025 and covers goods that account for about $30 billion in annual imports from the U.S.

What it does#

• Applies a 25% surtax calculated on the value for duty (as set out in sections 47–55 of the Customs Act) to many U.S.-origin products listed in the Order.
• Limits the surtax to goods that qualify as U.S. origin under the marking rules (goods eligible to be marked as of the United States).
• Does not apply to U.S. goods that were already in transit to Canada on February 4, 2025.
• Targets many everyday categories, including certain food products, appliances, cosmetics, apparel, plastic goods, and pulp and paper.
• The surtax is in addition to any regular customs duties.
• The government says it will publish a remission process to consider requests for relief in exceptional cases.
• The Department of Finance launched a public comment process on a broader list of possible future measures. The Canada Border Services Agency will administer the surtax at the border.

Who's affected#

• Canadian importers, distributors and retailers of the listed U.S. goods.
• Canadian consumers of those products, who may see higher prices if importers pass on the surtax.
• Canadian manufacturers that use U.S. inputs in their production — some input costs could rise.
• U.S. exporters and the U.S. firms whose goods are named in the Order.
• Firms and sectors that rely on integrated Canada–U.S. supply chains.
  If you want to know whether a specific product is covered, the Order lists many tariff item codes; that list is the definitive reference.

Why it matters#

• This is a retaliatory trade measure aimed at pressuring the United States to remove tariffs Canada says were imposed on Canadian goods.
• It can raise the landed cost of many consumer and business goods coming from the U.S., with downstream effects on prices and production costs in Canada.
• The surtaxes stay in place until the U.S. removes its tariffs, and the Government warns further measures could follow after the public comment period.
• There is a stated plan for a remission process to limit hardship in exceptional cases, but details are to be published.