The Government of Canada has announced important changes to its tariff regime affecting imports from the United States through an Order issued on August 29, 2025.
Notably, the Order differs substantially from Ottawa's prior public announcements about prospective changes to the tariff regime. While the government had previously stated that counter tariffs would only be lifted on "CUSMA qualifying" goods, Canada, in fact, completely lifted the counter tariffs that were initially imposed in March 2025, with the exception of certain steel, aluminium, and automotive products.
The Government of Canada has published an amended Customs Notice outlining updates to surtax orders imposed since March, 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).
These changes aim to provide tariff relief to Canadian businesses by reducing the financial burden caused by surtaxes on a variety of goods and materials.
The complete, updated counter tariff list is now available from the Government of Canada.
Repeal of general counter tariffs on U.S. goods
As of September 1, 2025, all counter tariffs on U.S. goods are repealed, with notable exceptions for steel, aluminum, and automotive products. This repeal means that Canadian importers will no longer face a "general" surtax on most U.S. imports.
Furthermore, a clarification has been issued retroactively confirming that tariffs were not meant to apply on items classified under chapters 98 and 99 of the tariff schedule unless those items were explicitly listed in the Schedule to the Order. These chapters typically cover special categories like temporary imports, samples, or goods for processing. Refunds may be available if these tariff items could have been claimed and were not.
Continued tariffs on steel, aluminum, and automotive goods
Despite the broad repeal, certain tariffs will remain in place. Steel and aluminum products continue to be subject to counter tariffs set at 25%, although the specific product schedules have been updated and should be carefully reviewed by importers to understand which goods are affected. Similarly, tariffs will still apply to motor vehicles and automotive parts listed under Schedule 1 or a combination of Schedule 1 and Schedule 2 of the Order. Businesses dealing with these sectors should be aware of the ongoing tariffs and monitor the updated schedules closely.
Removal of retaliatory tariffs and impact on preferential tariff treatment
A critical update is that if a "product of the U.S." was previously subject to Canada's 25% retaliatory tariff but its tariff classification is no longer included in the list of goods still subject to tariffs effective September 1, 2025, then Canada's retaliatory tariff no longer applies to that good. Again, contrary to initial announcements, this change applies regardless of whether the good qualifies as originating under the Canada-United States-Mexico Agreement (CUSMA). Consequently, products of the U.S. that are no longer subject to retaliatory tariffs may be imported either duty free if they qualify for CUSMA, or under MFN tariff treatment if they do not, just as they were prior to the counter tariffs coming into effect in March 2025, i.e. "status quo."
Tariff remission available for certain uses
Importantly, the amended Order provides opportunities for tariff remission on qualifying products of the U.S. that continue to attract tariffs. Remission may be granted when goods are imported for specific purposes, such as manufacturing, processing, packaging, health care, public health, public safety, and national security. Additionally, tariff relief applies to certain goods outlined in the Schedules to the Order.
Note that, effective September 1, Finance Canada has stopped accepting remission applications under the general remission framework for goods for which the surtax has been repealed. Finance Canada is still reviewing applications submitted before September 1, 2025, for goods that were previously subject to surtaxes.
Administration and claims process
The Canada Border Services Agency (CBSA) will oversee the administration of the Order, including the processing of tariff remission claims. Importers must ensure that claims meet all prescribed conditions to benefit from the relief measures.
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