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Canada to Remove Surtax/Retaliatory Tariffs on U.S. CUSMA Goods Sept. 1, Sectoral Remain


Trade Update • August 22, 2025

Key Points:

  • Canada will eliminate all retaliatory tariffs on U.S. goods that qualify under CUSMA rules of origin, effective September 1.

  • Sectoral surtaxes/tariffs remain in place on U.S. steel, aluminum, and autos.

  • Decision follows Prime Minister Mark Carney’s call with U.S. President Donald Trump on August 21.

  • White House welcomes the move, calling it “long overdue,” but broader disputes remain unresolved.

  • Canada plans consultations ahead of next year’s CUSMA review while advancing domestic “nation-building” projects.

  • United States Surtax Order (2025-1) repealed effective September 1, 2025.

  • United States Surtax Order (Steel and Aluminum 2025) updated September 1, 2025.

  • United States Surtax Order (Motor Vehicles 2025) updated September 1, 2025.

O

n August 22, 2025, Prime Minister Mark Carney announced that Canada will remove all retaliatory duties on U.S. goods that are compliant with CUSMA rules of origin by September 1, 2025 (CBC News, Aug. 22, 2025).

Carney emphasized that 85% of Canada-U.S. trade will continue to flow tariff-free, preserving what he called a “unique advantage” despite Washington’s recent tariff hikes under Executive Order 14293.

Sectoral Surtaxes/Tariffs

  • Steel & Aluminum: Canada’s countermeasures remain in place pending further talks with the U.S.
  • Autos: Retaliatory duties on U.S. autos continue.
  • U.S. Tariffs: The U.S. continues to apply 35% duties on most Canadian imports not covered by CUSMA, along with 40% duties on transshipped goods.

Next Steps

  • Carney confirmed consultations with Canadian industries will begin in September to prepare for the 2026 CUSMA joint review.
  • Ottawa will pursue broader economic strategy, including:
    • Expanding non-U.S. trade markets.
    • Accelerating domestic infrastructure and resource projects.
    • Increasing investments in defense and national security.

A White House official welcomed Canada’s move, noting it “creates space for more serious discussions” on steel, autos, and other strategic sectors.

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.

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