Canada's retaliatory tariff on US Steel & Iron Products exports

Canada’s twenty-five percent surtax on US steel was the opening move of its 2025 counter-measure package, and it was deliberately broad. Enacted through the United States Surtax Order published as SOR/2025-66 and effective March 13, 2025, the order named US-origin iron and steel articles across tariff headings in Chapters 72 and 73 — flat-rolled product such as heading 7208, but also a wide range of downstream fabricated steel goods. The surtax was the direct mirror of the US Section 232 steel duty that prompted it, part of a counter-measure response the Department of Finance valued at roughly twenty-nine point eight billion Canadian dollars.

The breadth of the chapter coverage is what made the steel surtax bite. Because the order worked at the heading level rather than naming a short product list, a US exporter shipping not just primary mill output but structural sections, tube and pipe, wire, and fabricated steel articles all fell within scope. The integrated nature of the North American steel market — where semi-finished and finished steel crosses the border repeatedly through the supply chain — meant the charge touched a large share of bilateral steel trade rather than a narrow slice of it.

The decisive development came on September 1, 2025, when an amending order announced by Prime Minister Carney on August 22 removed the surtaxes on US goods covered by the Canada-United-States-Mexico Agreement. For steel, this meant that US-origin product qualifying under the agreement’s rules-of-origin returned to duty-free treatment, leaving the twenty-five percent charge to fall mainly on non-qualifying shipments. The result is a two-tier outcome that the entry on this site records as superseded by a removal event: CUSMA-qualifying US steel moves north free of the surtax, while steel that cannot establish qualifying origin still faces it.

For a US steel producer, that makes origin documentation the entire game. Establishing CUSMA-qualifying status — through the agreement’s rules-of-origin for steel, including its melt-and-pour provisions where applicable — is the difference between duty-free access and a twenty-five percent penalty. An exporter should confirm whether a given shipment qualifies before pricing it, retain the supporting origin evidence against the possibility of a later reassessment by the border agency, and treat the surviving non-qualifying-goods surtax as the durable risk rather than assuming the September rollback cleared the charge entirely.

See also: Canada tariff overview, Steel & Iron Products, and Canada’s full retaliation list.