Canada-U.S. Trade War Briefing: Counter-Tariffs Now in Effect as CBSA Issues Importer Guidance

The Huron Chamber of Commerce publishes this briefing to keep members informed of substantive developments in Canada’s trade dispute with the United States, including changes to tariffs, government programs, official announcements and economic data that may affect local businesses.

Canada’s latest counter-tariffs on U.S. goods are now in effect. As of 12:01 a.m. on September 8, surtaxes of 15, 25 and 50 per cent apply to approximately $27.6 billion in selected U.S.-origin imports, matching the rates applied by the United States to corresponding Canadian goods under its Section 338 and Section 232 measures.

The Canada Border Services Agency also released detailed guidance on September 7 explaining how the new surtaxes will be administered at the border. For businesses importing U.S. goods, the notice provides important clarification on origin, shipments already in transit, low-value imports, calculation of the surtax and reporting through the CARM system. https://hcoc.ca/news-8914

Canada’s latest counter-tariffs take effect

The new measures apply to products concentrated in sectors including steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics. In some categories, including certain steel and aluminum products, previously existing Canadian counter-tariffs increase from 25 per cent to 50 per cent. Existing measures on other products, including U.S. automobiles, continue separately.

The Department of Finance’s complete tariff-item list remains the authoritative source for determining which products are affected and the applicable rate. https://hcoc.ca/news-8927

The Huron Chamber’s September 8 Counter-Tariff Guide has also been updated to reflect the current federal list: https://hcoc.ca/sep-8-tariff-guide-pdf

CBSA guidance clarifies how the surtax applies

The CBSA’s new Customs Notice 26-23 provides several practical details that importers should be aware of.

The surtax is based on the origin of the goods, not simply the country from which they are shipped. It applies to goods considered to originate in the United States under Canada’s CUSMA country-of-origin marking rules. U.S.-origin goods can therefore remain subject to the surtax even when they enter Canada from another country. The measures apply to both commercial and casual imports.

The CBSA also confirms that the surtax applies to shipments that would otherwise qualify for the postal or courier de minimis remission thresholds. In other words, importing an affected U.S.-origin product in a low-value courier or postal shipment does not, by itself, avoid the new surtax.

Goods that were already in transit to Canada when the surtaxes took effect are exempt. However, importers must be able to demonstrate that the goods were in transit before September 8. Acceptable evidence can include bills of lading, cargo control documents or other shipping records showing that the goods were bound for Canada and under the control of a carrier.

The notice also clarifies that most goods classified under Chapters 98 and 99 of the Customs Tariff are exempt unless the specific tariff item is listed in the surtax order. Where a product would otherwise be subject to both the new U.S. surtax order and Canada’s Steel Derivative Goods Surtax Order, the two surtaxes are not stacked. Only the surtax under the new United States Surtax Order applies.

For commercial imports, businesses must identify affected goods when filing their Commercial Accounting Declaration through CARM. CBSA has established separate surtax codes for the three rates: 26186A for 15 per cent, 26186B for 25 per cent and 26186C for 50 per cent. The surtax is calculated on the value for duty, and GST is subsequently calculated on a value that includes the surtax.

Businesses using customs brokers should confirm that classifications, origin information and the appropriate surtax codes are being applied correctly. https://hcoc.ca/news-8914

Tariff remission remains available in exceptional cases

The Department of Finance has also clarified the process through which Canadian businesses can seek remission from the counter-tariffs.

Remission may be considered where goods used as business inputs cannot reasonably be sourced in Canada or from non-U.S. suppliers, as well as in other exceptional circumstances where the surtax could cause severe adverse effects on the Canadian economy. The process is intended for exceptional cases rather than as a general tariff exemption. https://hcoc.ca/news-8939

Applications require detailed information on the goods involved, their tariff classification, import volumes and values, efforts to identify alternate suppliers, and the expected effect of the surtax on the business.

For Huron County manufacturers and other businesses dependent on specialized U.S. inputs with few practical alternatives, the remission process may warrant review.

Canadian exports to the U.S. fell sharply in July

New Statistics Canada merchandise trade data released September 3 provide additional evidence of changing Canadian trade patterns.

Canadian exports to the United States fell 6.6 per cent in July, the largest monthly percentage decline since April 2025. Imports from the U.S. increased 1.8 per cent, reducing Canada’s merchandise trade surplus with the United States from $10.3 billion in June to $5.9 billion in July.

Overall Canadian merchandise exports declined 2.3 per cent during the month, while imports rose 2.2 per cent. Canada’s worldwide merchandise trade surplus consequently narrowed from $4.2 billion to $769 million.

The decline in U.S. exports was partly attributable to commodities such as crude oil and gold, meaning the monthly change cannot be attributed entirely to tariffs. https://hcoc.ca/news-8952

Exports to non-U.S. markets reach a record

At the same time, Canadian exports to markets outside the United States increased 7.4 per cent in July to a record $25.6 billion, marking the third consecutive monthly increase. Non-U.S. markets accounted for 33.7 per cent of Canadian merchandise exports during the month.

That shift is consistent with new Export Development Canada survey results showing that 72 per cent of Canadian exporters intend to pursue new international markets over the next two years, up from 65 per cent five months earlier. Europe was identified as an attractive market by 31 per cent of exporters surveyed, followed by Asia-Pacific at 20 per cent. https://hcoc.ca/news-8968

EDC notes that its survey was completed before the latest U.S. Section 338 tariffs took effect on August 22, so the results do not reflect exporter reaction to the most recent escalation.

Expanded FedDev support expected

The federal government has committed an additional $1.5 billion to the Regional Tariff Response Initiative, delivered in southern Ontario through FedDev Ontario.

Under the expansion, eligible businesses may receive up to $3 million in non-repayable assistance, consisting of up to $1 million for eligible investment projects and up to $2 million for demonstrated liquidity needs. Businesses must have been viable before the tariffs were imposed and have annual revenue of at least $1 million. https://hcoc.ca/news-8983

At the time of publication Tuesday, FedDev Ontario was still indicating that full details of the enhanced initiative, including the new liquidity support, would be published September 8. Businesses affected by tariff-related cash-flow pressures should monitor the program page as those details are released.

What businesses should do now

With the counter-tariffs now in effect, businesses importing goods connected to U.S. supply chains should confirm the HS classification and origin of affected products, determine whether a surtax applies, and retain documentation for any goods that qualify for the in-transit exemption.

Businesses should also speak with their customs broker or trade adviser about CARM reporting requirements and review whether the federal remission framework, FedDev Ontario assistance or other tariff-response programs may apply to their situation.

The Huron Chamber will continue monitoring tariff measures, relief programs, negotiations and economic data as the dispute develops.

For continuing tariff information and business resources: https://hcoc.ca/us-trade-war

To receive Chamber news, business updates and advocacy information directly by email: https://hcoc.ca/newsletters