Canada:  Canadian Government Repeals Surtax on Certain U.S. Origin Goods, While Surtax Remains on Iron, Steel, Aluminum and Autos  

On August 29, the Government of Canada issued the Order Amending and Repealing Certain Orders Made Under the Customs Tariff (United States Surtax) (Order), which repeals the application of Canada’s 25% retaliatory surtax (Surtax) to numerous U.S. origin goods, effective September 1.

Key takeaways for importers:

• Canada has repealed its Surtax, effective September 1 on all U.S. origin goods, with the exception of the Surtax on iron and steel and related articles (HTS Chapters 72 and 72), aluminum and related articles (HTS Chapter 76) and automobiles (HTS Chapter 87), which remains in place.
• While the repeal of the Surtax is forward-looking and no longer applies to certain U.S. origin goods as of September 1, 2025 (i.e. Surtaxes paid by importers prior to September 1 will not be refunded), amendments to the application of the Surtax to goods classified under a tariff item under Chapters 98 and 99 are retroactive. Importers may be eligible for refunds on certain importations.
• As of September 1, 2025, Finance Canada is no longer accepting requests for remission for goods on which the Surtax have been repealed.  
• Compliance with the Surtax (from the date of initiation to September 1, 2025), still remains subject to trade compliance verifications administered by the Canada Border Services Agency.

Background

The Order amends Canada’s three existing surtax orders, which have authorized a 25% retaliatory tariff on numerous U.S. origin goods since March and April 2025: United States Surtax Order (2025-1), the United States Surtax Order (Steel and Aluminum 2025) and the United States Surtax Order (Motor Vehicles 2025). Collectively, tariffs were removed on CAD 14.2 billion in goods that had been in place since March 13, 2025 and CAD 30 billion in goods that had been in place since March 4, 2025. However, Canada’s retaliatory tariffs on iron and steel and related articles (HTS Chapters 72 and 72), aluminum and related articles (HTD Chapter 76) and automobiles (HTS Chapter 87) remain in place. Canada has maintained its Surtax on these goods given that the U.S. maintains tariffs in these sectors with no exemptions for USMCA origin goods. Note that a number of non-industrial items remain subject to the Surtax (e.g. stoves, ranges, barbecues, sewing needles, radiators, tables, steel wool).

The Order follows Prime Minister Carney’s announcement that all USMCA originating goods would be exempted from Canada’s retaliatory tariffs as of September 1. In reality, the Order is much broader than this initial announcement, in an effort to “incentivize a negotiated settlement with the U.S.”. As of August 31, 2025, the Surtax applied to over 1,800 tariff items. As of September 1, 2025, the Surtax applies to only 313 tariff items.

If a U.S. origin good was previously subject to Canada’s 25% retaliatory tariff, and its tariff item is not included on this list (select “effective September 1, 2025”), Canada’s retaliatory tariff no longer applies, regardless of whether the good originates under the USMCA. Accordingly, U.S. origin goods no longer subject to Canada’s retaliatory tariff may be imported using UST preferential tariff treatment if originating under the USMCA or using MFN preferential tariff treatment. 

As of September 1, Finance Canada is no longer accepting applications for remission of the Surtax for goods where the Surtax has been repealed. As of the time of publication of this blog, we understand that Finance Canada continues to review those applications regarding goods previously subject to the Surtax filed prior to September 1, 2025.

The relevant revised Customs Notices, reflecting the Order, are available here:

• CN 25-10: United States Surtax Order (2025-1)
• CN 25-11: United States Surtax Order (Steel and Aluminum)
• CN 25-15: United States Surtax Order (Motor Vehicles 2025)
• CN 25-19: United States Surtax Remission Order (2025)

Summary of Canada-US Tariffs as of September 1, 2025