{"id":29903,"date":"2025-03-14T16:43:00","date_gmt":"2025-03-14T20:43:00","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=29903"},"modified":"2025-03-14T17:00:28","modified_gmt":"2025-03-14T21:00:28","slug":"u-s-tariffs-and-canadian-retaliatory-measures","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/global-trade-customs\/u-s-tariffs-and-canadian-retaliatory-measures\/","title":{"rendered":"U.S. tariffs and Canadian retaliatory measures"},"content":{"rendered":"\n

United States Tariffs<\/h2>\n\n\n\n

Effective Tuesday, March 4, 2025, and following a 30-day pause, President Donald J. Trump implemented tariffs on goods originating from Canada and Mexico under the International Emergency Economic Powers Act<\/em> (\u201cIEEPA<\/strong>\u201d), the National Emergencies Act, <\/em>and the Trade Act of 1974<\/em>. Goods originating from Canada and Mexico and presented for entry into the U.S. are subject to U.S. tariffs levied at the rate of 25% on the value for duty. Certain energy goods originating in Canada are subject to a lower 10% tariff.[1]<\/a><\/p>\n\n\n\n

As a result of  United States Executive Order<\/a> issued on March 6, 2025, Canadian-origin imports qualifying under the Canada-U.S.-Mexico Free Trade Agreement (the \u201cCUSMA<\/strong>\u201d) are temporarily exempt from the 25% duty levied on Canadian imports. The March 6, 2025, Executive Order also reduced duties for potash from Canada that does not qualify under the CUSMA from 25% to 10%. A 10% duty rate on Canadian energy and energy resources remains in place.<\/p>\n\n\n\n

As a countermeasure to U.S. tariffs, Canada imposed a 25% surtax on U.S.-origin goods pursuant to the United States Surtax Order (2025-1)<\/em><\/a>,valued atC$30 billion. The surtax came into effect on March 4, 2025.<\/p>\n\n\n\n

A 25% ad valorem tariff on all imports of steel and aluminum products, as well as derivative steel and aluminum imports into the U.S., went into effect on March 12, 2025. This tariff was imposed under section 232 of the Trade Expansion Act of 1962<\/em>.<\/p>\n\n\n\n

Following a dollar-for-dollar approach, Canada is imposing 25% reciprocal tariffs on a\u00a0list of steel products worth $12.6 billion and aluminum products worth $3 billion<\/a>, as well as additional imported U.S. goods worth\u00a0$14.2 billion, for a total of\u00a0$29.8 billion as of\u00a0March 13, 2025. The list of additional products affected by counter-tariffs includes tools, computers and servers, display monitors, sports equipment, and cast-iron products.[2]<\/a><\/p>\n\n\n\n

The U.S. tariffs do not appear to apply to certain imported goods that are currently subject to the U.S. de minimis <\/em>exception. However, such duty-free de minimis <\/em>treatmentwill cease to be available for otherwise covered articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expeditiously collect tariff revenue.  <\/em>President Trump has stated that the tariffs are necessary to combat an extraordinary threat to U.S. national security, including public health risks posed by drug trafficking.[3]<\/a><\/p>\n\n\n\n

Canadian Retaliatory Measures<\/h2>\n\n\n\n

Former Canadian Prime Minister Justin Trudeau announced, \u201cCanada will not let this unjustified decision go unanswered.\u201d[4]<\/a> The first phase of Canadian retaliatory measures was swiftly imposed following the announcement of U.S. tariffs.[5]<\/a> Effective Tuesday, March 4, 2025, certain U.S.-origin goods imported into Canada are subject to a 25% surtax on the value of duty. <\/p>\n\n\n\n

The surtax is imposed under the United States Surtax Order (2025-1). <\/strong><\/em>The surtax applies to certain U.S.-origin goods listed as tariff items in Schedule 3 to the order and imported into Canada. Goods originating from the U.S. are those 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.<\/em>[6]<\/strong><\/a> <\/em>The Schedule to the United States Surtax Order (2025-1) <\/em>contains a complete list of goods subject to the surtax.The surtax also appears to apply to U.S.-originating goods that may be eligible for the remission of customs duties, sales, or excise taxes under the Postal Imports Remission Order <\/em>or the Courier Imports Remission Order. <\/em>The surtax payable is in addition to any other duties owing, such as any applicable anti-dumping duties.<\/p>\n\n\n\n

Exemptions<\/h2>\n\n\n\n

The surtax should not apply to the majority of goods classified under, or goods that should be classified under, Chapter 98<\/a> of the Schedule to the Customs Tariff<\/em> [Special classification provisions \u2013 non-commercial<\/em>], with some exceptions.[7]<\/a>\u00a0 It should also not apply to goods that may be classified under the tariff items of Chapter 99 of the Schedule to Canada\u2019s Customs Tariff<\/em> [Special classification provisions \u2013 commercial<\/em>], with some exceptions.[8]<\/a><\/p>\n\n\n\n

The surtax should not apply to U.S. goods in transit to Canada on March 4, 2025, including goods that were already in transit before the surtax came into force. \u201cIn transit to Canada\u201d refers to goods that were bound for Canada but have not yet arrived and remain in the control of a carrier. An importer must prove that the goods in their possession were in transit to Canada to demonstrate that the surtax does not apply. Proof may be requested by the CBSA and may take the form of shipping documents, report of entry documents, and cargo control documents.[9]<\/a><\/p>\n\n\n\n

Proof of Origin<\/h2>\n\n\n\n

Proof of origin must be provided for all imported goods. Exceptions to this proof of origin requirement are set out in the Proof of Origin of Imported Goods Regulations <\/em>and Customs Notice 20-22: The Canada-United States-Mexico Agreement\u2019s (CUSMA) Regulatory Amendments and New Regulations Made Pursuant to the Customs Act.[10]<\/a><\/p>\n\n\n\n

For commercial goods, proof of origin can take the form of a commercial invoice or any other documentation that includes the following minimum data elements:<\/p>\n\n\n\n