Surtax on Chinese Steel and Aluminum

Summary#

The federal government changed the China Surtax Order (2024) to add and clarify surtaxes on certain steel and aluminum goods made in China. The Order sets a 100% surtax on some tariff items and a 25% surtax on another group, and it took effect on October 22, 2024 with some narrow transit exemptions.

What it does#

• Replaces parts of the original China Surtax Order (2024) to create two groups of affected tariff items:
  • Goods listed in what is now Schedule 1 are subject to a 100% surtax on their value for duty.
  • Goods listed in the new Schedule 2 are subject to a 25% surtax on their value for duty.
• Adds a long list of tariff item numbers (mainly steel and aluminum product codes) into the new Schedule 2.
• Exempts goods that were already "in transit" to Canada on specific dates:
  • Schedule 1 goods in transit to Canada on October 1, 2024 are exempt.
  • Schedule 2 goods in transit to Canada on the day section 3.1 comes into force (the Order’s effective date, October 22, 2024) are exempt.
• Confirms the surtaxes are applied in addition to any other duties (for example, anti‑dumping or countervailing duties).
• Assigns implementation and customs handling to the Canada Border Services Agency under the Customs Tariff rules.

Who's affected#

• Importers of steel and aluminum products from China — they will face higher duties on affected goods.
• Canadian steel and aluminum producers and workers — the surtax is intended to protect them from unfair competition.
• Downstream manufacturers that use steel or aluminum (for example, in automotive, construction, renewable energy, packaging and electronics) — they may see higher input costs.
• Canadian consumers — some price increases for goods that use these metals are possible if importers pass on costs.
• Canada Border Services Agency — will administer the surtax at the border.
• If it’s unclear whether a specific product is covered by Schedule 1 or Schedule 2, importers and brokers may need to check the tariff code lists or seek guidance.

Why it matters#

• The government says the measure responds to Chinese government policies that have created excess capacity and low-priced exports in steel and aluminum. The surtax is meant to limit unfairly traded imports and protect jobs and investments in Canada’s steel and aluminum sectors.
• The surtaxes can raise the cost of affected imports immediately (up to the shown 25% or 100%), which may be passed on along supply chains and to consumers in the short term.
• The measure aligns Canada with actions by trading partners (for example, the United States and Mexico) and is intended to help preserve North American supply chains.
• The government also points to environmental effects: replacing some high‑carbon Chinese steel and aluminum with domestic or other sources could lower overall emissions, since Chinese production is described in the regulatory note as having higher CO2 intensity (for example, about 12.5 tons CO2 per ton for some aluminum versus 2 tons in Canada).