Update as of February 4, 2025:

Following recent discussions between Prime Minister Justin Trudeau and President Donald Trump, Canada and the United States have agreed to delay the implementation of the 25% surtax on certain U.S. goods for 30 days. This temporary pause provides both countries with time to negotiate and finalize a broader border security agreement.

Temporary Suspension: The 25% surtax, initially set to take effect on February 4, 2025, is now deferred until March 6, 2025, pending the outcome of ongoing negotiations.

Continued Vigilance: Importers should remain vigilant during this period. It’s essential to review the list of impacted commodities and assess how the surtax may affect your operations if implemented after the 30-day suspension.

Collaborate with Brokers: We strongly recommend that importers engage proactively with their customs brokers to develop strategies and ensure compliance should the surtax come into effect. For expert guidance, contact Summit Customs Brokers for assistance in navigating these changes.

While the suspension offers temporary relief, the situation remains fluid. Staying informed and prepared is crucial to mitigate potential disruptions to your supply chain.

Effective February 4, 2025, the Government of Canada has implemented a 25% surtax on specific goods imported from the United States, as outlined in the United States Surtax Order (2025). This measure is a direct response to recent U.S. tariffs imposed on Canadian products.

What You Need To Know: 

Surtax Application: The 25% surtax applies to goods originating from the U.S., determined based on eligibility for U.S. marking under the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. This includes both commercial and personal imports, regardless of the exporting country. Notably, goods classified under Chapter 99 of Canada’s Customs Tariff are subject to the surtax, except those temporarily imported for repair or re-imported after repair. Goods under Chapter 98 are generally exempt, with specific exceptions.

Proof of Origin: Importers must provide proof of origin for all affected goods, as per subsection 35.1(1) of the Customs Act. For commercial goods, acceptable documentation includes a commercial invoice or any document containing the minimum data elements specified in Annex 5-A of CUSMA. Personal importations are considered U.S. origin if marked accordingly or lacking other country markings without evidence to the contrary.

Surtax Calculation: The surtax is calculated as 25% of the value for duty of the imported goods, in addition to any other applicable duties and taxes. The value for duty is determined according to sections 47 to 55 of the Customs Act.

Duties Relief and Drawback Programs: Canada’s Duties Relief and Duty Drawback Programs are available for surtax paid or payable, subject to the provisions of the Canada-United States-Mexico Agreement (CUSMA).

Please refer to the Department of Finance Canada’s official announcement for a comprehensive list of affected products and their corresponding Harmonized System (HS) codes. 

These countermeasures will remain in effect until the U.S. removes its tariffs against Canada. Goods in transit to Canada as of February 4, 2025, are exempt from the surtax.

Importers are encouraged to review Customs Notice 25-03 and contact Summit Customs Brokers for guidance on complying with the new surtax requirements.