December 2025

• Effective December 26, 2025, tariff rate quotas for countries that have a free trade agreement in force with Canada will be reduced from 100% to 75% of 2024 levels, with over-quota volumes continuing to face a 50% surtax. Canada will continue to honour its existing CUSMA carve-out. As such, the United States and Mexico will continue to be exempted from this requirement.

Imposition of 25 percent Steel Derivative Tariff:

Effective December 26, 2025, Canada will apply a 25% tariff on the full value of listed steel derivative products from all countries. This measure will apply initially to a list of steel derivative products produced in Canada.

• The initial list is expected to apply to over $10 billion in steel derivative imports. It will cover derivatives for which steel content is a large portion of the full value of the product, with the product categories shown below.

Steel Derivative Products Categories 

• Certain shapes of iron/non-alloy steel
• Doors and windows
• Wire, ropes, cables, and chains
• Fasteners (e.g., nails, screws)
• Structures (e.g., prefabricated buildings, bridges, and wind towers)
• Steel and iron cloth, grille, and netting
• Seating with metal frame and certain metal furniture

A complete list of Steel Derivative HS Tariff Classification Numbers may be found here.

The tariff will not apply to:

1. goods that are subject to a tariff under the China Surtax Order (2024), the United States Surtax Order (Steel and Aluminum 2025), the Order Imposing a Surtax on the Importation of Certain Steel Goods or the Steel Goods and Aluminum Goods Surtax Order;
2. goods that are casual goods, as defined in section 2 of the Persons Authorized to Account for Casual Goods Regulations;
3. goods that are classified under a tariff item of Chapter 98 of the List of Tariff Provisions, even if the goods are otherwise classifiable under a tariff item set out in the schedule;
4. goods that are imported before July 1, 2026 for use in the manufacture of motor vehicles or chassis for motor vehicles or in the manufacture of parts of or accessories for motor vehicles or chassis for motor vehicles;
5. goods that are imported before July 1, 2026 for use in aircraft, ground flying trainers or spacecraft or in parts of aircraft, ground flying trainers or spacecraft;
6. utility wind towers, and sections of those towers, that are classified under tariff item 7308.20.00 and imported for installation in energy projects located west of the Ontario–Manitoba border; and
7. goods that are in transit to Canada on the day on which tariffs come into force.

Requests for remission of tariffs on derivative products will be considered on a case-by-case basis to address situations where goods cannot be sourced domestically or other exceptional circumstances that could have severe adverse impacts on the Canadian economy.

Expiry of the temporary remission of counter-tariffs on US goods:

Canada’s temporary remission of counter-tariffs for goods used in Canada for manufacturing, processing, food and beverage packaging, or agricultural production is currently set to expire on December 15, 2025. This temporary remission on US steel is now set to expire effective January 31, 2026, with the continued exception of goods used for the manufacturing of automobiles, auto parts, and aerospace products. The remission of counter-tariffs on aluminum products will also continue beyond January 31, 2026.

Importers will still be eligible to apply for remission under the remission framework published by the government on March 4, 2025, which provides for ongoing tariff relief in a narrow set of circumstances, for example where inputs cannot be sourced domestically.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.