Canada's retaliatory tariffs on US exports

Canada’s surtax-order tradition

Canada answers US tariffs through a long-established legal instrument called a surtax order. Under section 53 of the Customs Tariff, the federal cabinet can impose an additional duty — a surtax — on goods from a country whose trade actions it judges to harm Canadian interests, and that surtax is published as a Statutory Order and Regulation in the Canada Gazette. When the United States renewed its Section 232 metals duties in early 2025, Ottawa reached for exactly this tool, assembling a counter-measure package the Department of Finance valued at roughly twenty-nine point eight billion Canadian dollars. The result is a schedule that is unusually transparent by global standards: each charge maps to a numbered SOR with a precise effective date and a published list of affected tariff lines. The rates and lines on this page are recorded in the International Trade Administration Foreign Retaliations Database and cross-checked against the Canada Gazette orders cited below.

The steel and aluminium surtaxes

The first wave landed on metals. Effective March 13, 2025, Canada applied a twenty-five percent surtax to US-origin steel under tariff heading 7208 and related Chapter 72 and 73 lines, and a companion twenty-five percent surtax to US-origin aluminium products under heading 7601 and the broader Chapter 76. Both were enacted through the United States Surtax Order published as SOR/2025-66, a direct mirror of the US Section 232 action that prompted it. For a US steel mill or aluminium producer shipping north, the surtax stacked on top of whatever ordinary duty the line already carried, and because the order named entire chapters rather than a handful of products, its reach across the metals trade was broad.

The motor-vehicle surtax

A second order followed for automobiles. Effective April 9, 2025, Canada imposed a twenty-five percent surtax on US-assembled passenger vehicles under heading 8703.23 through SOR/2025-122, the United States Surtax Order (Motor Vehicles). This measure was drafted with a deliberate carve-out: it targets vehicles that do not meet the regional-value-content rules of the Canada-United-States-Mexico Agreement. A US-built vehicle whose content qualifies under CUSMA is exempt; one that does not qualifies for the full twenty-five percent surtax. That design ties the auto measure directly to the continental content rules rather than to a flat country-of-origin test, which is why the vehicle line behaves differently from the metals lines on this site.

The CUSMA carve-out and the September 2025 rollback

The Canadian schedule then moved in the opposite direction from most retaliation stories. On August 22, 2025, Prime Minister Carney announced an amending order that removed the surtaxes on US goods covered by CUSMA, effective September 1, 2025. For the steel and aluminium lines, this meant that US-origin metal qualifying under the agreement’s rules-of-origin no longer carried the twenty-five percent charge, leaving the surtax to bite mainly on non-qualifying shipments. That is why the metals entries on this site are recorded as superseded by a removal event and why a passenger-vehicles line appears at zero percent: it models the September rollback. The discrete Canada Gazette issue for the amending order had not been published as a separate citation when these figures were compiled, so the removal is referenced here by its announcement date and corroborated through the Foreign Retaliations Database; the precise SOR citation should be substituted once the Gazette issue is confirmed.

What US exporters should watch

The practical lesson for a US exporter is that CUSMA qualification is the decisive variable in the Canadian market. A steel or aluminium shipment that meets the agreement’s rules-of-origin moves north free of the surtax after the September rollback; the same metal that fails to qualify still faces the full charge. For automakers, the regional-value-content calculation determines whether a vehicle is exempt or carries the twenty-five percent surtax outright. This makes documentation — certificates of origin, content tracing, and the supporting customs paperwork — the single most valuable compliance investment for any US producer selling into Canada, far more so than for markets where the retaliation is a flat rate regardless of content.

How the surtax is collected, and how broad it reaches

A Canadian surtax is collected at the border by the Canada Border Services Agency in the same way as an ordinary customs duty: the importer of record self-assesses the charge on the declared value, and the surtax is remitted alongside the regular duty and the goods-and-services tax. Because a surtax order is written against tariff headings rather than a short list of named products, its reach is wider than the three product families that headline this page. The metals order swept entire chapters of the tariff schedule — iron and steel articles across Chapters 72 and 73, and aluminium across Chapter 76 — so a US exporter shipping any covered intermediate or finished metal product fell within scope, not merely primary mill output. Importers account for the surtax on their customs entry at the time of release, and because the charge turns on both the tariff classification and the country-of-origin determination, an error in either can trigger a reassessment by the agency long after the goods have physically cleared the border — a compliance exposure that persists well beyond the shipment date.

The political framing mattered too. The counter-measure package was presented as a calibrated, dollar-for-dollar response sized to the value of the US metals tariffs it answered, and the government emphasised that it would be wound back as the underlying dispute eased — which is precisely what the September 2025 CUSMA rollback delivered. That posture distinguishes the Canadian approach from a purely punitive one: the orders were drafted from the outset with an off-ramp tied to the continental agreement, so the schedule has tracked the diplomatic state of play rather than hardening into a permanent fixture. For planning purposes, a US exporter should treat the surviving non-qualifying-goods surtax as the durable core and the broader metals charge as contingent on whether a given shipment can document CUSMA-qualifying origin.

Verifying a specific rate

To confirm a Canadian measure, find the product in the Foreign Retaliations Database by tariff heading, then read the numbered SOR in the Canada Gazette for the operative legal text and the list of covered lines. The Gazette is the authoritative record, and its orders are precise about effective dates and chapter coverage. For any line touched by the September 2025 rollback, the critical follow-up is to determine whether the specific shipment qualifies under CUSMA, because that single determination decides whether the surtax applies at all. The figures here reflect the database and the cited orders as of May 2026; for a binding transaction, confirm the current order and the CUSMA status with a licensed Canadian customs broker.