Trade policy between Canada and the United States has shifted several times since early 2025, and each shift has changed which importers actually owe a counter tariff. Canada introduced broad retaliatory surtaxes on U.S. goods in March 2025, then rolled most of them back in September 2025, keeping only steel, aluminum, and automotive products under tariff. As of this writing, that narrower scope still applies, but a new round of U.S. tariffs taking effect August 19, 2026 has put Canada’s response back on the table.
For importers, this means the question “does my product owe a counter tariff” has a different answer today than it would have had a year ago. Unlike Canada’s standard customs duties, counter tariffs are temporary trade measures tied to a specific, evolving list of products. Businesses importing from the United States need to check the current list, not rely on what applied during the original March 2025 rollout, before completing a customs declaration with the Canada Border Services Agency (CBSA).
This guide explains what Canada’s counter tariffs are, what’s actually in effect right now, how they’re calculated, and what to watch for as trade talks continue through August 2026.
What Are Canada’s Counter Tariffs?
Canada’s counter tariffs are retaliatory surtaxes imposed on specified goods imported from the United States, introduced in response to U.S. trade measures affecting Canadian exports. Like ordinary customs duties, they’re collected by the Canada Border Services Agency (CBSA) when goods are accounted for, but they are a separate charge, layered on top of any regular duties, GST, or other taxes that already apply.
The scope of these measures has changed substantially since they were introduced, and the current scope is narrower than most importers assume:
March–April 2025: Canada introduced retaliatory tariffs in phases. The first, effective March 4, 2025, applied a 25% surtax to roughly C$30 billion of U.S. goods, food, beverages, cosmetics, household goods, apparel, paper products, and other consumer and industrial categories. A second phase on March 13, 2025 added another 25% surtax on steel, aluminum, and products made from them. A third measure, effective April 9, 2025, applied a 25% surtax specifically to motor vehicles.
September 1, 2025: Canada removed its counter tariffs on any U.S. good that qualifies as CUSMA-compliant, eliminating the March 2025 measures for roughly C$30 billion in goods, including the food, apparel, cosmetics, and household goods categories many importers still assume are affected. At the same time, Canada raised its rate on non-CUSMA-compliant U.S. goods from 25% to 35%. Steel, aluminum, and motor vehicle imports from the U.S. were excluded from this relief and remain under a 25% counter tariff, because the U.S. has not exempted CUSMA-compliant goods in those three sectors from its own tariffs.
February 1, 2026: Temporary remission relief that had allowed certain steel goods (imported for manufacturing, food and beverage packaging, and agricultural production) to avoid the surtax expired after two extension periods. That relief is no longer available for most steel goods in those categories.
As of August 2026: Canada’s counter tariffs apply narrowly, to steel, aluminum, and automotive products from the U.S., at 25%, and to any other non-CUSMA-compliant U.S. good, at 35%. CUSMA-compliant goods outside the steel, aluminum, and auto sectors are not currently subject to a Canadian counter tariff. A formal CUSMA review began July 1, 2026, and a new round of U.S. tariffs on Canadian autos, alcohol, and dairy is scheduled to take effect August 19, 2026, both of which could change this scope again. See the callout later in this guide.
Because the list has changed twice already, importers should treat “is my product currently affected” as a question to check against the current government schedule for every shipment, not something to assume based on a product’s history.
Which Goods Are Subject to Canada’s Counter Tariffs?
As of August 2026, three categories of U.S. goods are subject to a Canadian counter tariff:
- Steel and aluminum products, and goods manufactured using them, at 25%, in place since March 13, 2025 and still in effect.
- Motor vehicles, at 25% of the value for duty (calculated on a reduced base for CUSMA-qualifying vehicles, see the calculation section below), in place since April 9, 2025 and still in effect.
- Any other U.S. good that does not qualify as CUSMA-compliant, at 35%, since September 1, 2025.
U.S. goods that qualify as CUSMA-compliant, and fall outside steel, aluminum, and autos, are not currently subject to a counter tariff. This is the single most important change since the original March 2025 rollout: food, beverages, cosmetics, household goods, apparel, paper products, and most other consumer and industrial categories that were surtaxed in March 2025 were relieved effective September 1, 2025, provided the goods meet CUSMA rules of origin.
This makes CUSMA qualification the decisive factor for most importers, more than tariff classification alone. To determine whether a shipment owes a counter tariff, an importer needs to establish:
- Whether the good qualifies as originating under CUSMA rules of origin, supported by proper origin documentation.
- The correct HS tariff classification, since steel, aluminum, and auto-sector goods remain surtaxed regardless of CUSMA status.
- Whether the good appears on the current government surtax list, available as a single searchable table on Canada’s Department of Finance website.
- Whether the applicable rate is 25% (steel, aluminum, autos) or 35% (non-CUSMA-compliant goods outside those sectors).
Country of origin remains distinct from country of shipment. A good manufactured outside the United States and merely routed through it is not automatically U.S.-origin, while a good assembled in the United States using non-U.S. components may still qualify as U.S.-origin depending on Canada’s origin rules. Because CUSMA qualification now determines whether most goods owe anything at all, maintaining supplier certifications and origin documentation is more consequential than it was under the original, broader 2025 measures.
Given the pace of change over the past year, and the pending escalation described later in this guide, importers should re-check the current surtax list before every shipment rather than relying on a prior classification, even one confirmed as recently as a few months ago.
How Counter Tariffs Are Calculated
Once an importer determines that a product is subject to Canada’s counter tariffs, the next step is calculating the applicable surtax. Understanding how these charges are determined is essential for estimating landed costs, preparing customs declarations, and avoiding accounting errors.
The applicable counter tariff rate depends on which category a good falls into, not a single flat rate across all covered goods:
- 25% for U.S. steel, aluminum, and automotive products (the categories that remained in effect after the September 2025 rollback).
- 35% for any other U.S. good that does not qualify as CUSMA-compliant (raised from 25% effective September 1, 2025).
- 0%, no counter tariff applies, for CUSMA-compliant U.S. goods outside the steel, aluminum, and auto sectors.
As with the original measures, the surtax is calculated on the value for duty determined under Canada’s standard customs valuation rules, and is assessed in addition to any ordinary customs duties and GST.
Example, steel or aluminum product: A CUSMA rules-of-origin analysis doesn’t exempt this category. Value for duty of CAD 50,000 at the 25% rate produces a counter tariff of CAD 12,500.
Example, non-CUSMA-compliant good outside steel, aluminum, and autos: Value for duty of CAD 50,000 at the 35% rate produces a counter tariff of CAD 17,500.
Example, CUSMA-compliant good outside steel, aluminum, and autos: No counter tariff applies, regardless of value for duty, provided origin documentation supports the CUSMA claim.
Motor vehicles follow a modified calculation: for CUSMA-qualifying vehicles, the value of Canadian- or Mexican-origin content used in production is excluded from the value for duty before the 25% rate is applied, generally reducing the taxable base rather than the rate itself. Importers of vehicles should confirm the current calculation method with a customs broker, since this treatment has been adjusted since the tariff was first introduced.
Because the applicable rate now depends on a CUSMA determination that didn’t affect most goods under the original 2025 measures, an incorrect origin claim carries more financial consequence today than it did a year ago, the gap between 0%, 25%, and 35% is far wider than any classification error under the original flat-rate structure.
Importing Goods Subject to Counter Tariffs
Goods subject to Canada’s counter tariffs are accounted for through the same customs processes used for other commercial imports. The Canada Border Services Agency (CBSA) administers these measures as part of the normal import accounting process, meaning businesses remain responsible for accurately declaring goods and paying all applicable duties, taxes, and surtaxes.
Under the CBSA Assessment and Revenue Management (CARM) system, commercial importers account for imported goods using the Commercial Accounting Declaration (CAD). This declaration replaces the former B3 Customs Coding Form and serves as the official accounting document for commercial imports into Canada.
When accounting for goods subject to counter tariffs, importers should ensure the declaration accurately reflects:
- Tariff classification.
- Country of origin.
- Value for duty.
- Applicable tariff treatment.
- Counter tariff calculations.
- GST and any other applicable import charges.
Because CARM operates on a self-assessment model, importers remain legally responsible for the accuracy of information submitted to CBSA, even when working with a customs broker.
Supporting documentation should be maintained for every commercial shipment. Depending on the transaction, this may include:
- Commercial invoices.
- Bills of lading.
- Purchase orders.
- Supplier declarations.
- Origin documentation.
- Product specifications.
- Customs valuation records.
Maintaining complete records helps businesses respond efficiently to CBSA verification requests and supports future corrections or refund applications if required.
Businesses importing regularly from the United States should also establish internal compliance procedures to review tariff classifications, monitor changes to Canada’s counter tariff schedules, and verify that customs declarations remain accurate as trade measures continue to evolve.
The next section explains the remission programs, available exceptions, refund procedures, and importer compliance responsibilities that may help businesses manage the financial impact of Canada’s counter tariffs while remaining compliant with CBSA requirements.
Remission and Exceptions
Remission orders continue to provide relief in specific, narrowly defined circumstances, but the direction of policy since early 2026 has been toward tightening this relief, not expanding it. Importers should not assume that remission described in older guidance, including guidance from earlier in 2025, is still available.
The clearest example: temporary broad-based remission had allowed certain steel goods imported for use in healthcare, public safety, national defence, food and beverage packaging, and agricultural production to avoid the surtax. After two extension periods, that remission expired on January 31, 2026, and is no longer available for steel goods in those categories, except for a narrow set of specifically listed exclusions.
Relief still available includes provisions for goods that were already in transit to Canada before a given measure’s effective date, supported by documentation such as bills of lading, shipping confirmations, and purchase orders dated before the relevant order came into force. This type of relief is inherently tied to a specific implementation date and does not apply on an ongoing basis.
Given that remission eligibility has already changed once, and further changes are plausible given the CUSMA review and the pending U.S. tariff escalation, importers relying on a remission order should confirm current eligibility against the government’s published order text before each shipment rather than assuming a prior approval still applies.
What’s Changing in August 2026
Two developments underway this month could change the scope of Canada’s counter tariffs again, and importers should watch both closely.
A formal CUSMA review began July 1, 2026. This is the scheduled joint review of the agreement, and could result in changes to how CUSMA origin rules, and therefore counter tariff exemptions, are applied going forward.
The United States announced new tariffs on Canadian goods on July 20, 2026. Using Section 338 of the Tariff Act of 1930, a provision rarely invoked in the modern era, the U.S. imposed additional 50% tariffs on Canadian motor vehicles, alcoholic beverages, and dairy products, scheduled to take effect August 19, 2026. Canadian officials have indicated they are prepared to respond if a negotiated resolution isn’t reached before that date, which could mean a new or expanded round of Canadian counter tariffs.
As of this writing, negotiations between the two governments are ongoing and the outcome is not yet settled. Importers of any product, not only those in the sectors directly named in the U.S. proclamations, should:
- Monitor Canada’s Department of Finance and CBSA announcements through at least the end of August 2026.
- Avoid assuming the current 25%/35%/exempt structure described in this guide will remain unchanged past August 19, 2026.
- Talk to a customs broker before finalizing large or time-sensitive shipments during this window.
Refunds, Corrections, and Compliance
Even businesses with well-established import procedures can occasionally discover errors after goods have been accounted for. Canada’s customs framework allows importers to correct customs declarations and request refunds where duties or counter tariffs have been paid incorrectly or where eligibility for remission is established after importation.
If an importer identifies an error in tariff classification, country of origin, customs valuation, or the application of counter tariffs, the declaration should be corrected in accordance with CBSA procedures. Prompt corrections help demonstrate that the importer has exercised reasonable care and reduce the likelihood of more significant compliance issues later.
Situations that commonly require corrections include:
- Incorrect HS tariff classification.
- Incorrect origin determination.
- Incorrect customs value.
- Application of counter tariffs to goods that were not subject to the measures.
- Failure to claim an available remission or exemption.
Where counter tariffs have been overpaid, importers may be eligible to request a refund, provided they satisfy the requirements established under Canadian customs legislation. Refund requests should be supported by appropriate documentation, including customs accounting records, commercial invoices, supplier declarations, and any evidence supporting the basis of the claim.
The Canada Border Services Agency also conducts post-import compliance verifications to ensure importers have correctly declared their goods and paid the appropriate duties, taxes, and surtaxes. During these reviews, CBSA may request documentation supporting:
- Tariff classification.
- Country of origin.
- Customs valuation.
- Counter tariff calculations.
- Eligibility for remission.
Maintaining organized records is therefore an essential part of customs compliance. Importers should retain commercial invoices, transportation documents, purchase contracts, supplier certifications, customs accounting records, and any documentation supporting origin or valuation determinations.
Failure to comply with customs requirements may result in reassessments or Administrative Monetary Penalties (AMPs) where businesses fail to exercise reasonable care. Regular internal compliance reviews can help identify issues before they become enforcement concerns and improve the overall accuracy of customs declarations.
For businesses that import frequently, developing documented customs procedures and periodically reviewing import transactions can significantly reduce compliance risks while ensuring continued adherence to Canada’s evolving counter tariff measures.
Frequently Asked Questions
What are Canada’s counter tariffs?
Canada’s counter tariffs are retaliatory surtaxes imposed on specified U.S.-origin goods in response to trade measures introduced by the United States. They are collected in addition to any ordinary customs duties and taxes that may apply.
Which goods are affected?
As of August 2026, three categories: U.S. steel and aluminum products (25%), U.S. motor vehicles (25%, calculated on a modified base for CUSMA-qualifying vehicles), and any other U.S. good that does not qualify as CUSMA-compliant (35%). U.S. goods that qualify as CUSMA-compliant and fall outside the steel, aluminum, and auto sectors are not currently subject to a counter tariff. This scope could change after August 19, 2026, see the callout above.
Do all products imported from the United States pay the counter tariff?
No. The surtax applies only to specified U.S.-origin goods included in the government’s retaliatory tariff measures.
How are counter tariffs calculated?
Counter tariffs are generally calculated by applying the applicable surtax rate to the value for duty determined under Canada’s customs valuation rules.
Can I qualify for remission?
Possibly. The Government of Canada has introduced remission programs for qualifying circumstances. Eligibility depends on the specific remission order and the conditions established for that program.
Can I request a refund?
Yes. If counter tariffs were paid incorrectly or you later become eligible for relief, you may be able to request a refund by following CBSA procedures and providing supporting documentation.
What documentation should importers keep?
Businesses should retain customs accounting documents, commercial invoices, transportation records, supplier declarations, valuation records, tariff classification analyses, and any documents supporting origin or remission claims.
Were Canada’s counter tariffs reduced or removed at any point?
Yes. Effective September 1, 2025, Canada removed its counter tariffs on U.S. goods that qualify as CUSMA-compliant, covering roughly C$30 billion in goods across categories like food, apparel, and household goods. Counter tariffs on U.S. steel, aluminum, and automotive products were not part of that relief and remain in effect. Non-CUSMA-compliant goods outside those sectors saw their rate raised from 25% to 35% at the same time.
Bringing It All Together
Canada’s counter tariffs have changed twice since they were introduced in March 2025, first expanding through April 2025, then narrowing substantially in September 2025, and the current scope may not hold past August 19, 2026 given the active trade dispute with the United States. For most importers, the decisive question is no longer simply “is my product on a list,” it’s “does my product qualify as CUSMA-compliant,” since that determination now separates a 0% rate from a 25% or 35% surtax.
Importers should confirm current CUSMA origin status, tariff classification, and value for duty for every shipment, account for goods properly through the Commercial Accounting Declaration (CAD) under CARM, and maintain documentation supporting origin and valuation determinations. Given the pace of change over the past year, and the unresolved escalation described above, treat any guidance, including this one, as accurate only as of its stated date, and confirm current requirements with a customs broker before completing time-sensitive or high-value shipments.
If your business regularly imports U.S.-origin goods into Canada, working with an experienced customs broker can simplify compliance with Canada’s counter tariff requirements while helping ensure accurate customs accounting and efficient border clearance.
