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A tariff (also known as an import duty or customs duty) is a tax imposed by a country on imported products. This makes imported goods more expensive compared to competing products. Tariffs are usually imposed and collected by a country's customs authority or agency when goods cross the border.

The importer of record is responsible for paying tariffs on imported goods. However, how the cost of tariffs are addressed between the importer and exporter may also be defined by the Incoterms that apply to their contract. This would be a commercial matter for the companies involved to determine.

Understanding Incoterms

Find the latest information on Canada’s official response to U.S. tariffs. Finance Canada will continue to update this information as needed.

To follow up on your request regarding tariff remissions, you should send an email to: remissions-remises@fin.gc.ca

Make sure to include “U.S. Remission” in the subject line to ensure your inquiry is directed appropriately and handled efficiently.

Canadian companies may be eligible for the Duties Relief Program or the Drawback Program managed by the Canada Border Services Agency (CBSA) which allow qualified companies to import commercial goods without paying duties, or by granting a refund of duties, provided those goods are eventually exported.

On March 4, under the International Emergency Economic Powers Act (IEEPA), the U.S. imposed 25% tariffs on imports of Canadian goods, and 10% tariffs on imports of Canadian energy (since amended to include potash). On March 7, the U.S. implemented an exemption for goods imported from Canada that qualify for duty-free preferential treatment under the CUSMA. There is no end date specified for the U.S. tariffs imposed under IEEPA, nor for the exemption.

Under Section 232, on March 12, the U.S. imposed global tariffs of 25% on imports of steel and aluminum, including from Canada. On April 3, also under Section 232, the U.S. imposed global tariffs of 25% on imports of automobiles, which apply to the non-U.S. content of CUSMA-compliant vehicles. On May 3, the U.S. imposed global tariffs of 25% on imports of automobile parts, except that imports of CUSMA-compliant automobile parts are currently exempted. There is no end date specified for either of these U.S. tariff actions.

U.S. tariffs on Canada do not ‘stack’ on top of one another. Via an April 29 Executive Order, goods subject to Section 232 tariffs on autos/auto parts are no longer subject to the IEEPA tariffs or the Section 232 tariffs on steel and aluminum. Similarly, goods subject to the IEEPA tariffs are no longer subject to the Section 232 tariffs on steel and aluminum. 

National governments publish lists of numerical tariff item codes (called Harmonized System or HS codes) that are used to classify goods that are imported (and exported). These lists also include the tariff rate (also called an import duty rate) that must be paid when the good is imported into that country. 

Tariffs and the goods they apply to are typically published online by governments. For example, the full Canadian Customs Tariff, including HS codes and the duty rates that apply to goods being imported into Canada, is available online from the Canada Border Services Agency. The U.S. International Trade Commission provides a search function for codes under the U.S. Harmonized Tariff Schedule (HTS) that apply to goods imported into the U.S. The U.S. Customs Border Protection (CBP) Cargo Systems Messaging Service also publishes guidance related to changes in U.S. tariff rates, including specific U.S. HTS codes, to assist importers.

Examples of other jurisdictions with similar resources include the European Union TARIC database, France’s RITA (French only) database, and the United Kingdom Trade Tariff service online.

To read the latest information on U.S. policy changes, please visit the following sites maintained by the U.S. government (English only):

• Federal Register – Executive Orders
• The White House Presidential Actions

You may wish to talk to your brokers and banks, and evaluate the need to set up U.S. bank accounts or Customs and Border Protection accounts.

For a full list of resources and information related to global market expansion and diversification, please see Diversify your exports: How Canadian businesses can succeed in global markets. The Trade Commissioner Service (TCS) has compiled these resources to support your international business development.

Canadian goods exported through the U.S. are subject to U.S. tariffs when they are "goods entered for consumption" in the U.S. The determination of whether a good is entered for consumption in the U.S. is ultimately one to be made by U.S. Customs and Border Protection (CBP). Various U.S. statutes and provisions pertaining to "transportation in bond and merchandise in transit" may apply and would be germane in determining if a good has been entered for consumption in the U.S. For further information, please contact CBP.

Canada’s surtaxes only apply to goods originating in the U.S., which is defined as goods eligible to be marked as goods of the U.S. in accordance with the Determination of Country of Origin for the Purposes of Marking Goods (CUSMA Countries) Regulations). Accordingly, goods that are eligible to be marked as goods of Mexico are not subject to Canada’s surtaxes.

If you or your U.S. importer claimed CUSMA preferential treatment and the goods were still charged the 25% tariff, there are a few things you should verify:

• First, make sure the HS code used is correct for the product.
• Customs brokers are now required to include additional coding for tariff exemptions. These codes must be entered in a very specific order. Errors here can result in full tariffs being applied.
• Check to see if your good may be subject to a different tariff measure by the United States (e.g., Section 232 tariffs for steel, aluminum and their derivative products or the automotive and auto parts tariffs).
• If you're unsure about the entry, ask your customs broker to double-check the classification and coding.

If you have additional questions, contact the Trade Commissioner Service via its webform to submit your enquiry for troubleshooting support. We may be able to help identify where the issue occurred and what steps to take next.

Please note, the Trade Commissioner Service cannot guarantee outcomes or provide product-specific rulings.

If your goods were assessed with incorrect or inconsistent tariffs at U.S. entry, you may be able to request a correction, protest the decision, or seek a refund depending on the situation. For enquiries about tariff refunds or retroactive claims, you should contact the U.S. Customs and Border Protection, as they are responsible for assessing and collecting these tariffs. Ensure you have the right documentation to support the reason for the dispute such as product details, HS codes, or trade agreement eligibility.

 Request for a refund of duties paid must be submitted to the U.S. Customs and Border Protection within one year after the goods were imported into the U.S.

For duties paid to Canada, you have up to four years to file retroactive claims.

It is recommended to consult with a licensed customs broker to determine the most appropriate course of action based on your specific circumstances.

If you've experienced inconsistencies in how tariffs are being applied when exporting to the U.S.—for example, one shipment was charged while another was not—the best course of action is to contact the U.S. Customs and Border Protection. You or your customs broker can:

• submit an inquiry directly to the Customs and Border Protection
• request an advance ruling for clarification on how your product should be classified and whether tariffs should apply

For goods entering Canada, inquiries should be directed to the Canada Border Services Agency.

No. Tariffs are taxes or duties applied specifically to physical goods as they cross borders. Services, such as software subscriptions, consulting, architecture, education, and engineering, are not subject to tariffs.