CBSA Begins Implementing United States Surtax Order (Steel and Aluminum 2025)

With the 25% surtax now in effect, Canadian businesses are encouraged to explore relief options and risk mitigation strategies. They must also take proactive steps to ensure compliance with the new regulations.

The Canada Border Services Agency (CBSA) has issued Customs Notice 25-11, which outlines the implementation of the United States Surtax Order (Steel and Aluminum 2025).

This order, effective March 13, 2025, applies a 25% surtax on steel, aluminum, and other goods originating in the United States. It comes in response to the U.S. imposing a 25% import tariff on Canadian steel and aluminum as of March 12, 2025.

The new tariffs will impact a total of $29.8 billion in U.S. goods in addition to the $30 billion imposed last week.

Of this amount, $12.6 billion will affect steel products, $3 billion will apply to aluminum, and $14.2 billion will affect other goods, including computers, tools, water heaters, sports equipment, and cast-iron products.

The previously imposed $30 billion in tariffs—covering food and beverages, furniture and appliances, clothing, home goods, and certain automotive products—will continue to be in effect.

Scope of the United States Surtax Order

The United States Surtax Order applies to goods that originate in the U.S. and are imported for commercial or personal purposes, even if they are shipped from another country.

To determine whether a product is considered U.S.-origin, CBSA relies on the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. Goods are subject to the surtax if they are eligible to be marked as products of the United States under these guidelines.

The 25% surtax will not only apply to steel and aluminum products. It will be levied on other specified goods listed in the Schedule to the United States Surtax Order.

It is important to note that the new 25% surtax does not apply to U.S. steel, aluminum, and other goods that were in transit to Canada before March 13, 2025.

It also does not apply to returning U.S.-made goods that were previously imported into Canada and duty-paid.

Exemptions and special considerations

Certain goods may qualify for exemptions under specific provisions based on tariff classifications and special remission orders. Below are the key exemptions and exceptions:

Certain Chapter 98 and Chapter 99 goods

The surtax does not apply to aluminum and other goods listed in Schedule 1 if they are eligible for classification under Chapter 98 of Canada’s Customs Tariff.

However, the following tariff items under Chapter 98 remain subject to the surtax:

• 9804.30
• 98.25
• 98.26
• 9897.00.00
• 9898.00.00
• 9899.00.00

Similarly, the surtax does not apply to aluminum and other goods in Schedule 1 classified under Chapter 99 of Canada’s Customs Tariff, except for the following tariff items, which remain subject to the surtax:

• 9966.00.00
• 9971.00.00
• 9989.00.00

Goods classified under these restricted Chapter 99 tariff items are still subject to the surtax, even though they qualify for Most-Favoured-Nation (MFN) zero customs duty rates.

Surtax on steel goods in Schedule 2

The surtax applies to steel goods identified in Schedule 2 of the United States Surtax Order, even if they qualify for classification under Chapter 98 or 99 of Canada’s Customs Tariff.

These steel goods remain subject to the surtax, regardless of whether they are eligible for the Most-Favoured-Nation (MFN) zero customs duty rate under Chapter 98 or 99.

Postal and courier imports

The 25% surtax applies to postal and courier shipments, including those that may be eligible for the remission of customs duties, sales and/or excise taxes under the Postal Imports Remission Order or the Courier Imports Remission Order.

Special exemption for Akwesasne residents

The surtax does not apply to casual or commercial goods imported by residents of Akwesasne that qualify for remission under the Akwesasne Residents Remission Order.

Relief programs for Canadian importers

Canadian businesses affected by the United States Surtax Order may explore relief options through government programs designed to mitigate the impact of tariffs.

The Duties Relief Program and the Duty Drawback Program provide opportunities for importers to either defer or recover surtax payments under certain conditions.

However, importers should be aware that these relief options are subject to the provisions of CUSMA.

Proof of origin requirements

To comply with the surtax regulations, importers must provide satisfactory proof of origin for all goods entering Canada.

Under subsection 35.1(1) of the Customs Act, proof of origin must be provided unless an exception applies. Exceptions are outlined in the Proof of Origin of Imported Goods Regulations and Customs Notice 20-22.

For commercial goods, proof of origin can be provided through a commercial invoice or any other supporting document that includes the minimum data elements specified in Annex 5-A (Minimum Data Elements) of CUSMA. These requirements are also outlined in Appendix H of Memorandum D11-4-2: Proof of Origin of Imported Goods.

For personal imports (also known as casual goods), goods are considered to originate in the U.S. if they are marked as products of the United States. If an item does not have a country of origin marking, and there is no evidence suggesting it was produced in another country, it will still be treated as U.S.-origin.

Next steps for Canadian importers

To ensure your compliance with the new surtax order, Canadian importers are advised to take the following steps:

• Verify whether your products are included in the Schedule or exempted from the applicable surtax rates.
• Accurately classify your goods to ensure compliance and avoid penalties.
• Evaluate how the 25% surtax will affect your costs and consider sourcing alternatives.
• Apply for Duty Relief or Drawback, if applicable.
• Speak to your customs broker to discuss how to best accommodate this new surtax into your operations.

At Cole International, we offer customs and compliance consulting services to help importers navigate changing regulations. We also provide timely and efficient customs brokerage services for Canadian importers.

Please reach out to one of our trade professionals to discuss the impact of these new tariffs on your business and how we can help you.