Canada Imposes 25% Surtax on Steel and Aluminum With Chinese Content

Trade Update • August 1, 2025

Key Points:

• A 25% surtax on certain steel and aluminum goods containing Chinese-origin materials takes effect on July 31, 2025.
• Importers must provide certificates or reports proving goods do not contain steel or aluminum melted, poured, smelted, or cast in China; otherwise, the surtax will apply.
• After September 22, 2025, commercial invoices and reports alone will no longer be accepted as proof of origin.
• The surtax is charged in addition to all applicable duties and taxes, including customs duties, anti-dumping duties, and GST.
• Exemptions apply for goods in transit before July 31, U.S.-origin goods, shipments under CAD 5,000, casual goods, and certain tariff classifications.

he Government of Canada has introduced a new surtax order effective July 31, 2025, imposing a 25% surtax on certain steel goods melted and poured in China and aluminum goods smelted and cast in China imported into Canada. This surtax aims to address challenges from global overcapacity and unfair trade practices, aggravated by U.S. tariffs imposed under Section 232 of the Trade Expansion Act.

Proof of Origin and Documentation

Trump stated that if Canada imposes retaliatory tariffs, the United States will raise its own duties by an equal amount.

• Required Proof: Importers must obtain valid documentation—such as mill test certificates or certified inspection reports—proving their goods do not contain Chinese-origin steel or aluminum.
• Documentation Deadline: Until September 22, 2025, commercial invoices and reports may be accepted as evidence. After this date, only stricter documentation (e.g., mill certificates) is accepted.
• Enforcement: If importers fail to provide proof on request, the surtax will apply to their goods.

Surtax Calculation and Compliance

• How It’s Calculated: The surtax is 25% of the value for duty, calculated according to the Customs Act and payable on top of any regular customs duties, anti-dumping duties, and GST.
• Example: For a CAD 1,000 shipment, the surtax would be CAD 250 in addition to other duties and taxes.
• Declaration: Importers must declare this surtax using designated CBSA codes (25154A for steel, 25154B for aluminum) when filing customs paperwork.

Exemptions and Special Cases

Some shipments are exempt, including:

• Goods in transit to Canada before July 31, 2025 (with proper documentation, e.g., bills of lading).
• U.S.-origin goods classified under CUSMA regulations.
• Shipments with a total value for duty under CAD 5,000 per accounting declaration.
• Casual goods and goods subject to other China surtax orders.

Important Steps for Importers

• Review all incoming steel and aluminum supply chains for Chinese-origin materials.
• Prepare and retain all required documentation before importing.
• Update customs procedures ahead of the September 22, 2025, documentation change.
• Consult with customs brokers or the CBSA if unsure about compliance.

For additional information or questions, contact the CBSA’s Border Information Service or the Department of Finance.

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.