Canada/USA Trade War – Tariffs

Toronto, February 3, 2025

On Saturday, February 1^st, US President Donald Trump issued a release from the White House with details on the Executive Order Imposing 25 percent tariffs on Canada which take effect 12:01 a.m. February 4, 2025. In retaliation, Canadian Prime Minister, Justin Trudeau, announced a list of products from the United States subject to 25 per cent tariffs effective February 4, 2025.

Canada:

• 25 percent tariffs on a select list of US-made goods effective February 4, 2025.
• 25 percent tariffs on an additional list of US-made goods (to take effect in 21 days of issuance) – that list will be published later this week.

Customs Notice 25-03: United States Surtax Order (2025)

• Effective February 4, 2025, certain goods imported into Canada and originating in the U.S. are subject to a surtax in the amount of 25% of the value for duty in accordance with the United States Surtax Order (2025). The value for duty is determined in accordance with sections 47 to 55 of the Customs Act. The Schedule to the United States Surtax Order (2025) contains a complete list of goods subject to the surtax.
• The surtax will only apply to goods that originate in the U.S., which shall be considered as those goods eligible to be marked as goods of the U.S. in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.
• The surtax will apply to goods imported for commercial and personal purposes, even when exported from a country other than the U.S. into Canada.

Exceptions to Surtax

• The surtax will not apply to US goods that are in transit to Canada on the day on which the surtax comes into force. This includes goods that were in transit before the surtax comes into force. For the purpose of this Customs Notice, ‘in transit to Canada’ refers to goods bound for but not yet arrived in Canada, and under the control of a carrier. Importers must have proof in their possession that such goods were in transit to Canada in order to demonstrate that the surtax is not applicable. Such proof may include the following documentation: shipping documents (for example, a bill of lading), report of entry documents, and cargo control documents. Such proof may be requested at any time by a CBSA officer.
• The surtax will not apply to US goods that enter a Sufferance Warehouse on or before the day on which the surtax comes into force and subsequently enter the commerce of Canada (exit the sufferance warehouse).

See below links for additional information:

Government of Canada announces next steps in its response plan to unjustified US tariffs

Process for requesting remission of tariffs that apply on certain goods from the U.S.

Canada announces $155B tariff package in response to unjustified US tariffs

The list includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. A detailed list of these goods will be made available shortly.

USA:

• 25 percent tariffs on imports from Canada (10 percent on Canadian energy resources) and Mexico
  • Sec. 2. (a) All articles that are products of Canada as defined by the Federal Register notice described in subsection (e) of this section (Federal Register notice), and except for those products described in subsection (b) of this section, shall be, consistent with law, subject to an additional 25 percent ad valorem rate of duty. Such rate of duty shall apply with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on February 4, 2025, except that goods entered for consumption, or withdrawn from warehouse for consumption, after such time that were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. eastern time on February 1, 2025, shall not be subject to such additional duty, only if the importer certifies to CBP as specified in the Federal Register notice.
    • We are awaiting publication of the Federal Register notice in order to define “products of Canada”.
    • Tariffs against Mexico have been paused for one month, as Mexico have agreed to send 10,000 troops to the border to combat drugs and illegal entry.

• Additional 10 percent tariff on imports from China

See below links for additional information:

Fact Sheet: President Donald J. Trump imposes tariffs on imports from Canada, Mexico and China

Imposing duties to address the flow of illicit drugs across our northern border

Prime Minister Justin Trudeau is expected to speak with President Donald Trump today. Further information will be provided as it becomes available.

For more information, please call Brian Rowe, Director – Customs Compliance & Regulatory Affairs at (905) 882-4880, ext. 1213.