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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.

In the United States (U.S.) system, 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.

On February 1, 2025, President Trump signed an Executive Order applying 25% tariffs on all U.S. imports from Canada, with the exception of energy products which are subject to a 10% tariff under the International Emergency Economic Powers Act (IEEPA). On February 3, 2025, the President announced a pause on these tariffs until March 4. 

Following the pause, U.S. tariffs on all imports from Canada went into effect from 12:01 a.m. Eastern time on March 4, 2025, to midnight on March 6, 2025. 

In a March 6 Executive Order, as of 12:01 a.m. Eastern time on March 7, 2025, U.S. tariffs have been paused for goods imported from Canada that qualify for duty-free preferential treatment under the Canada-United States-Mexico Agreement (CUSMA). There is no end date specified for this exception. The March 6 amendment also adjusted the U.S. tariff rate on imports of non-CUSMA compliant potash from Canada to 10% effective March 7.

U.S. imports from Canada that were entered for consumption in the U.S. while the tariffs were in place (i.e., 12:01 a.m. Eastern time on March 4, 2025, to 12:00 a.m. Eastern time on March 7, 2025) were subject to the 25% or 10% tariff rate

The U.S. Section 232 25% tariffs on steel and aluminum in force since March 12,2025, and the Section 232 25% tariffs on autos in force since April 3, 2025, apply cumulatively to the IEEPA tariffs against Canada and Mexico in force since March 4, 2025.

For example, non-CUSMA compliant Canadian steel imported into the U.S. would be subject to a combined tariff rate of up to 50% (i.e., 25% IEEPA tariff + 25% Section 232 tariff).

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 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 originating in Mexico are not subject to Canada’s surtaxes.