Canada Introduces A 25% Surtax on Chinese-Based Steel and Aluminum Imports

This surtax addresses the risks associated with global overcapacity and non-market policies and practices in the steel and aluminum industries.

Starting July 31, 2025, Canada is imposing a 25% surtax on certain steel goods melted and poured in China, as well as on certain aluminum goods smelted and cast in China. 

This 25% duty applies to Chinese-based steel and aluminum goods imported for commercial purposes, and is in accordance with the Steel Goods and Aluminum Goods Surtax Order.

A complete list of goods subject to this surtax is available in the Schedule of the Order.

Canada had introduced its China Surtax Order (2024) last October, which applies a 25% duty on steel and aluminum imports from China.

However, goods subject to the duties imposed in October are exempt from the surtax on Chinese-based steel and aluminum imports. 

Documentation requirements

To demonstrate that the country of melt and pour (COM) for steel or the country of smelt and cast (CSC) for aluminum is not China, importers must have a commercial invoice, report, or certificate for proof.

The certificate or report can be in the form of a:

• Mill test certificate, mill test report or material test certificate, or material test certificate;
• Certificate of conformance, compliance, inspection, or analysis;
• Certified inspection report;
• Metallurgical test report; or
• Chemical analysis certificate.

Moreover, starting September 22, 2025, commercial invoices and reports will no longer be accepted to verify COM and CSC.

Proof of origin must also be provided for all imported goods upon request.

This may be in the form of a commercial invoice, a Canada Customs Invoice or any other documentation that indicates the country of origin.  

Note that the documentation must meet the requirements of any applicable obligations established under a free trade agreement or Canada's most-favoured-nation (MFN) or General Tariff treatment provisions.

How to calculate the surtax

The surtax duty on Chinese-based steel and aluminum amounts to 25% of the value for duty (VFD) for the imported goods and is in addition to other duties and taxes, such as customs duties, anti-dumping and countervailing duties, and taxes.

Here are two examples demonstrating how to calculate duties.

Example 1

If the value for duty is $1,000 and the imported goods have a most-favoured-nation duty rate of 0%, the calculation would be as follows (under a 25% duty rate per the Steel Goods and Aluminum Goods Surtax Order):

• • For the surtax:
    • $1,000 (VFD) x 0.25 (surtax rate) = $250 (surtax payable)
  • For the customs duties and taxes:
    • $1,000 (VFD) x 0 (% MFN duty) = $0 (customs duty)
    • $1,000 (VFD) + $250 (surtax payable) + $0 (customs duty) = $1,250 (value for tax)
    • $1,250 x 0.05 (% GST) = $62.50 (GST)

Total payable: $250 (surtax) + $0 (customs duty) + $62.50 (GST) = $312.50

Example 2

If the value for duty is $1,000 and the imported goods have a most-favoured-nation duty rate of 5%, and are subject to anti-dumping duties of $34, the calculation would be as follows (under a 25% duty rate per the Steel Goods and Aluminum Goods Surtax Order):

• • For the surtax:
    • $1,000 (VFD) x 0.25 (surtax rate) = $250 (surtax payable)
  • For the customs duties and taxes:
    • $1,000 (VFD) x 0.05 (% MFN duty) = $50 (customs duty)
    • $1,000 (VFD) + $250 (surtax payable) + $50 (customs duty) + $34 (anti-dumping duties) = $1,334 (value for tax)
    • $1,334 x 0.05 (% GST) = $66.70 (GST)

Total payable: $250 (surtax) + $50 (customs duty) + $34 (anti-dumping duties) + $66.70 (GST) = $400.70

Exceptions to this surtax

The surtax does not apply to Chinese-based steel and aluminum goods that:

• Are casual goods
• Are subject to the China Surtax Order (2024)
• Are in transit to Canada on July 31, 2025 (with proof)
• Were in transit to Canada before July 31, 2025 (with proof)
• Originate in the U.S., as per the regulations of the CUSMA country of origin determination
• Have a cumulative value for duty that does not exceed $5,000 (and accounted for under a single Commercial Accounting Declaration (CAD))
• Are classified under a tariff item of Chapter 98 of the Schedule to Canada's Customs Tariff

Next steps for steel and aluminum importers

If you import steel and aluminum goods into Canada, we recommend the following next steps:

• Review the Schedule of the Steel Goods and Aluminum Goods Surtax Order to determine if your products are subject to the new duty
• Ensure you have valid documentation proving COM (for steel) or CSC (for aluminum)
• Consider revising your pricing strategies to account for the 25% surtax in addition to existing duties and taxes
• Consult your customs broker to confirm proper classification, ensure your documentation meets CBSA requirements, and avoid costly delays or penalties

How Cole International can help

At Cole International, we provide customs and compliance consulting and customs brokerage services to help you navigate changing regulations and streamline the importing of goods into Canada.

If you import Chinese-based steel and aluminum goods into Canada, please reach out to one of our trade professionals to discuss the impact of this surtax order on your business and how we can help.