Canada announced further protections for its domestic steel industry, expanding the application of a 50% surtax on certain steel goods initially implemented on June 27, 2025 (Steel Surtax) and introducing a 25% surtax on all imported steel products (with the exception of the US) that contain steel melted and poured in China. The Steel Surtax was introduced following a public consultation to address the risk of steel trade diversion from third countries to the Canadian market due to the US Section 232 steel measures introduced in March 2025. The applicable Notice to Importers is available here and Customs Notice is available here. At the time of publication, these notices have not been revised to reflect the most recent announcement.
What Canadian and non-resident importers and foreign exporters need to know:
- As of June 27, Canada is relying on tariff rate quotas (TRQ) to control import volumes of ROW steel.
- From June 27 to July 31, a 50% surtax will continue to apply to imported steel products originating in countries that are not subject to a free trade agreement with Canada that exceed a country-specific TRQ or where importers fail to obtain a shipment-specific import permit.
- As of August 1, a 50% surtax will apply to ROW steel imports, with the exception of steel originating in Mexico and the United States, that exceed a country-specific TRQ or where importers fail to obtain a shipment-specific import permit.
- TRQs are administered on a first-come-first-serve basis, are country-specific, and are available to importers by quarter (commencing June 27, 2025) with unused TRQ being carried over to the next quarter.
- Importers require shipment-specific import permits to rely on a TRQ. The import permit must be issued prior to accounting for imported steel products under Canadian customs procedures.
- Once a TRQ volume is fully utilized, or should an importer fail to acquire a shipment-specific import permit, a 50% surtax will apply to the declared value for duty of the imported steel product.
- The 50% surtax applies in addition to customs duties and AD/CVD duties.
- The 50% surtax is cumulative with the surtax applicable under the China Surtax Order (2024).
- Prior to the end of July, a 25% surtax will apply to ROW steel imports, with the exception of the US, that contain steel melted and poured in China.
Canada Expands Steel Surtax
The Steel Surtax initially implemented annual TRQs for one year (until June 26, 2026) on imports of flat, long, pipe and tube, semi-finished and stainless steel products from non-free trade agreement countries. However, on July 16, 2025, Canada announced that the Steel Surtax will apply to countries that have a free trade agreement in force with Canada (while continuing to exempt the US and Mexico) as of August 1, 2025.
The TRQs are country-specific and are applied by quarter, with unused quota carried forward into the following period. Steel goods imported over the TRQ volumes specified for each class of good will be subject to the 50% surtax. The Steel Surtax quarters are as follows:
- Quarter 1: June 27, 2025 – September 25, 2025
- Quarter 2: September 26, 2025 – December 25, 2025
- Quarter 3: December 26, 2025 – March 26, 2026
- Quarter 4: March 27, 2026 – June 26, 2026
TRQs are administered on a first-come-first-serve basis for quarters 1 & 2. The government has reserved the right to administer the TRQs in an alternative way for quarters 3 & 4, promising further information at a later date after a public consultation. For purposes of the TRQ, country of origin is determined in accordance with the Determination of Country of Origin for the Purposes of Marking Goods (Non-CUSMA Countries) Regulations and Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.
Goods originating in the US and Mexico, casual goods, and goods properly classified under a tariff item of Chapter 98 of the List of Tariff Provisions are exempt from the Steel Surtax.
Importers must apply to Global Affairs Canada (GAC) for a shipment-specific import permit to declare the importation under the applicable TRQ. The import permit must be valid at the time the steel goods are accounted for under the Customs Act to avoid the application of the Steel Surtax. Subject to the exemptions noted above, use of General Import Permit No. 80 or 81 will result in the application of the Steel Surtax. Importers are responsible for reviewing GAC’s online utilization reports to track quota availability and for declaring the applicable surtax code on their Commercial Accounting Document, EDI or API (see Customs Notice).
China melt & pour tariffs
Canada has yet to provide further details on the proposed 25% surtax to be implemented by July 31, 2025 on steel melted & poured in China and exported from third countries. At this time, the government has advised that the measures will be implemented before the end of July and will apply to steel products currently subject to the China Surtax Order (2024).
