Last Updated: 08.04.2026
Canada’s tariff on US goods currently stands at 25% on selected American imports, particularly steel, aluminium, and certain automobiles. Most of the wider counter tariffs introduced earlier in 2025 were removed on 1 September 2025 after negotiations between Canada and the United States.
However, Canada continues to keep tariffs on key industrial sectors, where the US still applies tariffs to Canadian products. These measures are designed to protect Canadian businesses, encourage fair trade, and pressure the United States to reach a negotiated agreement.
Key Takeaways:
- Canada currently applies a 25% tariff on selected US steel, aluminium, and automobile imports.
- Most other tariffs on American products were removed in September 2025.
- Canada introduced the tariffs in response to US duties on Canadian exports.
- Goods such as orange juice, alcohol, clothing and appliances were previously affected.
- Canadian businesses may apply for exemptions, tariff relief and duty drawback schemes.
- The Canada-United States-Mexico Agreement (CUSMA) continues to play a major role in determining which products remain subject to tariffs.
Why Has Canada Introduced Tariffs on US Goods?
Canada introduced tariffs on US goods in response to tariffs imposed by the United States on Canadian exports. In early 2025, the US government placed 25% tariffs on many Canadian goods, including steel and aluminium, while energy products faced a lower 10% rate. Canada responded by introducing matching tariffs on selected American imports.
The purpose of these tariffs is not simply to raise money. Instead, they are intended to protect Canadian workers, businesses and industries from unfair trade measures. By applying equivalent tariffs to American goods, Canada aims to encourage the US to remove its own duties and return to more balanced trading conditions.
Canada’s approach also reflects the importance of the close trade relationship between the two countries. Every day, billions of pounds worth of goods move across the Canada-US border. Any restrictions or tariffs can therefore affect manufacturers, retailers and consumers in both countries.
Sarah Mitchell, Senior Trade Policy Adviser:
“Canada’s tariff strategy is largely designed as leverage. The government is signalling that if the US continues to target Canadian exports, Canada is prepared to apply pressure in sectors that matter to American businesses.”
| Reason for Canadian Tariffs | Explanation |
| Response to US tariffs | Canada matched tariffs already placed on Canadian exports |
| Protection of domestic industries | Canadian manufacturers and workers receive greater support |
| Trade negotiation pressure | Tariffs encourage the US to negotiate and reduce duties |
| Defence of CUSMA principles | Canada seeks to preserve fair North American trade rules |
What Tariffs Has Canada Placed on US Products in 2025?
Canada introduced several rounds of tariffs on American goods during 2025. The measures changed throughout the year depending on negotiations and developments between the two governments.
Tariffs Introduced in March 2025
The first major Canadian response came on 4 March 2025. Canada imposed tariffs on around CAD 30 billion worth of goods imported from the United States. These tariffs covered a wide range of everyday products.
Items affected included:
- Orange juice
- Peanut butter
- Beer and wine
- Coffee
- Household appliances
- Cosmetics
- Footwear and clothing
- Motorcycles
- Paper products
The tariff rate on these products was generally 25%. Canada selected goods that could place pressure on American exporters while limiting the effect on Canadian industries where possible.
A second round followed on 13 March 2025 after the US imposed tariffs on Canadian steel and aluminium. Canada responded with another 25% tariff package worth nearly CAD 29.8 billion. This package focused more heavily on industrial goods, including steel, aluminium, machinery and electronic equipment.
Tariffs Introduced in April 2025
The next major development took place in April 2025, when the US introduced a 25% tariff on Canadian automobiles. Canada reacted by imposing tariffs on selected American vehicle imports from 9 April 2025.
The tariffs applied to:
- Non-CUSMA-compliant vehicles imported from the United States
- The non-Canadian and non-Mexican content of CUSMA-compliant vehicles
This meant that not every vehicle crossing the border faced the full tariff. If a vehicle complied with the rules of origin under CUSMA, only the American-made components could be subject to the duty.
| Date | Canadian Tariff Action | Main Products Affected |
| 4 March 2025 | 25% tariffs on CAD 30 billion of US goods | Food, drink, clothing, appliances |
| 13 March 2025 | 25% tariffs on CAD 29.8 billion of US goods | Steel, aluminium, machinery |
| 9 April 2025 | 25% tariffs on selected vehicle imports | Cars and automotive parts |
Tariffs Removed in September 2025
By September 2025, Canada had removed most of the earlier tariffs on American goods. This decision followed signs of progress in negotiations and the fact that many Canadian goods were once again entering the United States without tariffs under CUSMA.
The Canadian government removed tariffs on:
- CAD 30 billion of products first targeted in March
- CAD 14.2 billion of industrial goods introduced later in March
However, Canada decided to keep tariffs on steel, aluminium and automobiles because the US still maintained restrictions on those sectors.
The September changes marked a shift from broad-based tariffs towards a more focused strategy targeting only a small number of industries.
Which US Goods Are Still Subject to Canadian Tariffs?
At present, the list of US goods still facing Canadian tariffs is much shorter than it was earlier in 2025. Canada continues to apply tariffs mainly to products linked to the sectors where the United States still imposes tariffs on Canadian exports.
The remaining goods include:
- American steel products
- Aluminium products
- Certain automobiles and automotive components
- Vehicle content that does not qualify under CUSMA rules
Products such as food, drink, clothing and household goods are no longer generally subject to the tariffs that existed earlier in the year.
The remaining measures are concentrated on industrial sectors because these industries are strategically important to both countries. Steel and aluminium play a major role in construction, transport and manufacturing, while the automotive industry supports thousands of jobs across North America.
What Is the Current Tariff Rate on US Steel, Aluminium, and Automobiles?
The current tariff rate on most US steel, aluminium and selected automobiles entering Canada is 25%. This rate has remained unchanged even after the September 2025 reductions.
For steel and aluminium, the 25% duty applies to products imported from the United States that fall within the categories identified by the Canadian government. These include construction materials, industrial metals and some finished products.
For automobiles, the rate also stands at 25%, but it is applied differently depending on whether the vehicle qualifies under CUSMA.
| Product Category | Current Canadian Tariff | Status & 2026 Update |
| Primary Steel & Aluminum | 50% | Retaliatory rate matched to new US Section 232 levels (Effective April 6, 2026). |
| Industrial Metal Derivatives | 25% | Applied to “Annex I-B” products like pipe fittings and structural components. |
| Industrial/Grid Equipment | 15% | Temporary “Transitional Rate” for metal-intensive equipment through 2027. |
| US-Origin Metal Products | 10% | Reduced rate for goods utilizing 95%+ U.S. melted/poured metal inputs. |
James Carter, Automotive Trade Economist:
“The vehicle tariffs are particularly significant because they do not always apply to the whole car. In many cases, only the American-made portion of a vehicle is affected, which creates additional complexity for manufacturers.”
The tariff structure encourages companies to source more parts from Canada or Mexico. It also provides an incentive for businesses to maintain production inside North America rather than relying on imported US content.
Which American Products Were Previously Subject to Canada’s Counter Tariffs?
Before September 2025, Canada had a much broader list of American products facing tariffs. The list covered both consumer goods and industrial materials.
Among the most notable products were:
- Orange juice
- Peanut butter
- Coffee
- Wine and beer
- Spirits
- Clothing and footwear
- Washing machines and refrigerators
- Cosmetics
- Sporting goods
- Computers and servers
- Display monitors
- Cast-iron products
These products were selected because many of them were exported from politically or economically important regions of the United States. By targeting those sectors, Canada hoped to increase pressure on the US government to reconsider its trade policies.
Many of these goods are no longer subject to tariffs after September 2025. This has reduced costs for Canadian importers and retailers and made it easier for consumers to purchase American products again.
How Do Canada’s Tariffs on US Goods Affect Consumers?
Canadian consumers are often the first to notice the impact of tariffs. When importers have to pay an extra 25% on certain products, the cost is usually passed on through higher prices in shops and online stores.
Earlier in 2025, Canadian households experienced higher prices on imported food, alcohol and household items from the United States. A bottle of wine, a kitchen appliance or a pair of trainers imported from America often became noticeably more expensive.
Although many of those tariffs have now been removed, the remaining duties on steel, aluminium and automobiles continue to affect prices indirectly. Vehicles may become more expensive because manufacturers face higher production costs. Construction and home improvement projects can also rise in price due to increased costs for steel and aluminium.
Michael Reeves, Consumer Market Analyst:
“Even when tariffs target industrial products, consumers eventually feel the impact. Higher costs for steel and aluminium can feed into everything from cars and household appliances to building materials.”
At the same time, some Canadian consumers have chosen to buy more domestic products. This shift has helped certain Canadian manufacturers and retailers benefit from increased local demand.
How Do Canadian Businesses Respond to US Import Tariffs?
Canadian businesses have had to adapt quickly to the changing tariff environment. Companies that rely on imported American materials have been particularly affected.
Impact on Manufacturers and Retailers
Manufacturers faced higher costs when importing steel, aluminium and machinery from the United States. Many firms responded by seeking alternative suppliers in Canada, Mexico or other countries.
Retailers also adjusted their product ranges. Businesses selling imported American goods often reduced their orders or replaced US products with Canadian-made alternatives. This helped to limit the effect of higher prices on customers.
Some businesses chose to absorb part of the additional cost rather than increasing prices immediately. However, this reduced profit margins and made it more difficult for smaller companies to remain competitive.
Supply Chain and Export Challenges
Supply chains between Canada and the United States are closely connected. A single product may cross the border several times during manufacturing. Tariffs therefore created additional complications for companies operating in both countries.
For example, an automotive manufacturer may import steel from the US, build parts in Canada and then export the finished vehicle back to the United States. Each stage becomes more expensive when tariffs are involved.
Businesses also faced uncertainty because tariff rules changed several times during the year. Companies had to monitor government announcements closely and adjust their plans whenever products were added to or removed from the tariff lists.
The uncertainty also delayed investment decisions. Some businesses postponed expansion plans until there was greater clarity about future trade relations.
What Does CUSMA Mean for Canada’s Tariffs on US Goods?
CUSMA, the Canada-United States-Mexico Agreement, plays a major role in determining whether tariffs apply. The agreement sets rules about which goods qualify for tariff-free treatment between the three countries.
If a product meets the CUSMA rules of origin, it may avoid tariffs entirely or face only a reduced charge. This is particularly important for the automotive sector, where many vehicles contain parts from all three countries.
Under the current system, CUSMA compliant vehicles do not face the full 25% tariff. Instead, only the American-made content of the vehicle is taxed.
The agreement therefore provides some protection for businesses that manufacture goods within North America and use Canadian or Mexican components.
How Do Canada’s Tariffs on US Goods Affect the UK and International Trade?
Although the tariffs are aimed at the United States, they may also affect businesses in the UK and elsewhere. British firms that export products to Canada or the US could face indirect effects if North American supply chains become more expensive or disrupted.
For example, a UK manufacturer that supplies components to a Canadian car company may find that demand changes if tariffs alter the cost of vehicle production. Similarly, UK businesses that compete with American exporters may gain an advantage if US products become more expensive in Canada.
The tariffs also highlight the growing importance of trade diversification. Canada has increasingly looked beyond the United States for imports and export opportunities. This may create new possibilities for UK companies, particularly in sectors such as machinery, food, technology and consumer goods.
Will Canada Remove Tariffs on US Goods in the Future?
Canada may remove more tariffs in the future if negotiations with the United States continue to improve. The removal of many tariffs in September 2025 suggests that both countries are willing to reduce tensions.
However, Canada has stated that tariffs on steel, aluminium and automobiles will remain in place until the US removes its own duties on Canadian exports. This means the future of the remaining tariffs depends largely on American trade policy.
“While the September 2025 de-escalation provided relief for consumer goods, the trade landscape shifted again in February 2026. Following the US Supreme Court’s decision to strike down previous IEEPA-based duties, the new 10% ‘Global Import Surcharge’ has created a fresh layer of complexity. For Canadian businesses, the priority isn’t just CUSMA compliance it’s now about navigating the new Section 301 investigations into forced labor and supply chain transparency that the USTR launched in March 2026. We are moving from a ‘tariff war’ to a ‘compliance war.'”
Conclusion: What Does Canada’s Tariff Policy Mean Going Forward?
Canada’s tariff policy on US goods has shifted significantly during 2025. Earlier in the year, a wide range of American products faced 25% tariffs. Since September, most of those measures have been removed, leaving only tariffs on steel, aluminium and selected vehicles.
The remaining tariffs continue to serve as a response to US measures on Canadian exports. While they protect some Canadian industries, they also increase costs for businesses and consumers. The future of these tariffs will depend on whether Canada and the United States can reach a more stable and balanced trade agreement.
FAQs
Are Canada’s tariffs on all US goods still in place?
No. Canada removed most of its tariffs on US goods in September 2025. Only tariffs on steel, aluminium and certain automobiles remain.
Which US products are still affected by Canadian tariffs?
The products still affected are mainly steel, aluminium, non-CUSMA compliant vehicles and the American-made portion of some CUSMA compliant vehicles.
Why did Canada remove some tariffs in September 2025?
Canada removed many tariffs because trade negotiations improved and many Canadian goods were once again entering the US without tariffs under CUSMA.
How much is Canada’s tariff on American steel and aluminium?
Canada currently applies a 25% tariff on selected American steel and aluminium products.
Do Canadian consumers pay more because of these tariffs?
Yes. Tariffs can lead to higher prices for imported products and may also increase the cost of vehicles, construction materials and household goods.
Can businesses apply for exemptions from Canada’s tariffs?
Yes. Businesses can apply through the Duties Relief Programme, Duty Drawback Programme or remission process if they meet the required conditions.
How does CUSMA affect tariffs between Canada and the United States?
CUSMA allows many goods to move between Canada, the US and Mexico without tariffs if they meet the agreement’s rules of origin.