25% Surtax on Chinese Melted Steel and Aluminum

Summary#

The Steel Goods and Aluminum Goods Surtax Order adds a 25% surtax on imports that contain steel “melted and poured in China” or aluminum “smelted and cast in China,” no matter which country ships them to Canada (the U.S. is excluded). The order comes into force on July 31, 2025, with some documentation rules changing on September 22, 2025.

What it does#

• The Steel Goods and Aluminum Goods Surtax Order taxes imports that include Chinese-made steel or aluminum at an extra 25% of their value for duty.
• It defines when steel is treated as “melted and poured in China” and when aluminum is “smelted and cast in China” so customs can decide which shipments are covered.
• Importers must show evidence to the Canada Border Services Agency (CBSA) that the metal was not melted/poured (or smelted/cast) in China. If they can’t, the goods are treated as containing Chinese metal and the surtax applies.
• Until September 22, 2025, a commercial invoice can be used as evidence; after that date importers generally must provide a certificate showing where the metal was melted/poured or smelted/cast.
• The order uses the same list of steel and aluminum tariff items as the earlier China Surtax Order (2024), and it covers goods classifiable under those tariff items (including some Chapter 99 entries).
• It does not stack with a separate quota-based measure: goods above quota levels are subject to a 50% surtax under the tariff-rate quota (TRQ) system instead of this surtax.
• Key exceptions: goods in transit to Canada on the coming-into-force date; shipments that have a cumulative value for duty of $5,000 or less on a single declaration; imports from the U.S.; “casual goods”; items under Chapter 98; and goods already covered by the China Surtax Order (2024).

Who's affected#

• Importers of steel and aluminum products into Canada.
• Downstream manufacturers that buy steel and aluminum (for example in automotive, construction, renewable energy, packaging and electronics).
• Canadian steel and aluminum producers, who the measure aims to protect.
• Consumers and small businesses could feel higher prices if importers pass on the added cost. Small importers with shipments valued under $5,000 on a single declaration are exempt.
• The Canada Border Services Agency (CBSA) will be the main agency checking evidence and applying the surtax.

Why it matters#

• The surtax is meant to stop companies from avoiding existing China tariffs by routing Chinese-made metal through third countries. That can protect Canadian mills and jobs by making products that contain Chinese metal more expensive to import.
• It could raise costs for some imported parts and finished goods. The government estimates the measure would affect about $224 million of steel imports and $36 million of aluminum imports (2024 figures), with possible additional costs to importers of up to $56 million for steel and $9 million for aluminum. Those costs could be passed to manufacturers or consumers.
• It may push businesses to change suppliers or source more from Canada or other countries.
• The government also points to environmental reasons: Chinese steel and aluminum production is described in the source as more carbon-intensive than many alternatives, so reducing imports of those inputs could lower the average carbon intensity of Canada's supply.