Impact of U.S. Tariffs on Canadian Companies
UPDATE: March 10th, 2025
ADDED: Executive Order – Duties to Address the Flow of Illicit Drugs Across our Northern Border
ADDED: Updated Chart 1: U.S. Tariffs Imposed on a Canadian Exporter
ADDED: Updated Chart 2: Canadian Scenarios & the Tariff Impact
Post Update:
President Trump issued an Executive Order with respect to IEEPA tariffs imposed on goods from Canada. Below is a summary of the key points from this Executive Order. To review the complete Executive Order, please click on the link below:
Duties to Address the Flow of Illicit Drugs Across our Northern Border
Executive Order – Duties to Address the Flow of Illicit Drugs Across our Northern Border
Key takeaways from this Executive Order:
- The duties will be suspended on USMCA-originating products of Canada and Mexico imported on or after 12:01 AM onย March 7, 2025
- The 25% tariffs will continue to be imposed on products of Canada and Mexico whichย are notย NAFTA โoriginatingโ.
- Currently there is no provision for refunding or forgiving the IEEPA tariffs already collected
- The tariff on non-originating potash is reduced from 25% to 10% ad valorem
Executive Order: Duties to Address the Flow of Illicit Drugs Across our Northern Border
UPDATE: March 3rd, 2025
ADDED: Executive Order – Further Amendment To Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China
Past Post:
Below is a summary of President Trump’s Executive Order. To review the full document, please click on the following link:
Further Amendment To Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China
Summary of Executive Order on Tariffs Against China:
- Increases tariffs on Chinese products from 10% to 20% due to inadequate action on synthetic opioid crisis
- Cites China’s failure to address the influx of fentanyl and other synthetic opioids into the U.S.
- Declares the opioid supply chain from China an “unusual and extraordinary threat” to U.S. national security, foreign policy, and economy
- Invokes authority under International Emergency Economic Powers Act (IEEPA) to impose higher duties
- Amends previous Executive Order 14195 to reflect the tariff increase
- Maintains that China has not taken sufficient cooperative enforcement actions
- Emphasizes implementation will be consistent with applicable laws and subject to available appropriations
- Does not create any new legal rights or benefits enforceable against the U.S. government
Note: Charts 1 & 2 Below have been updated to reflect the IEPPA tariff increase from 10% to 20%
The U.S. has implemented a series of tariffs that significantly impact Canadian companies acting as either an exporter, and/or the importer of record into the United States.
As of February 2025, these tariffs stem from multiple sources, including Section 301, International Emergency Economic Powers Act (IEEPA), and Section 232 on steel and aluminum products. The cumulative effect of these measures creates a complex and potentially costly trade environment for Canadian businesses.
Prior to 2025 โ Section 301 Tariffs
As a result of the China Section 301-Tariff Actions and Exclusion Process, the United States imposed a 25% Tariff on goods originating from China. Certain exclusions were approved by the administration on a case-by-case basis.
January 2025 – International Emergency Economic Powers Act (IEEPA)
Under the IEEPA, the following Tariffs have been imposed:
- 10% on Chinese goods
- 25% on Canadian goods
- 10% on Canadian crude oil and energy resources
- As defined in Section 8 of Executive Order 14156 of Jan. 20, 2025 (Declaring a National Energy Emergency), “energy” or “energy resources” means “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.”
As a result, based on the country of origin of the goods, and not the country it passes through, additional duties will apply on goods entering the United States from Canada:
Example: Chinese origin goods shipped from Canada to the United States
= Section 301 Tariff + IEEPA Tariff
= 25% + 10%
= 35% Tariff (in additional to applicable current U.S. duty rates)
Note: Provided shipment does not qualify for U.S. De Minimis Informal Entry Program
February 2025 – Section 232 Tariff on Steel and Aluminum Products
The Section 232 tariffs add further complexity for Canadian companies with a 25% tariff on foreign steel and aluminum, and a 10% tariff on their derivatives. Notably, the tariffs can be stacked, resulting in significantly higher duties.
If the Canadian company exporting the goods, is also acting as the Importer of Record into the United States, the following should additional tariff elements should be reviewed:
- All previously granted exclusions will be revoked effective March 12, 2025
- However, the proclamations contain a new exclusion provision from the tariffs for imports of covered steel and aluminum derivative articles, that were processed outside the United States using inputs that were, “melted and poured” or “smelted and cast” in the United States
- Goods entering a Free Trade Zone must be marked as โPrivileged Foreign Statesโ
- Drawbacks on the Tariff amount will not be permitted
- Derivatives classified in H.S. Chapters other than 73 & 76, will be subject to a 25% tariff on the value of steel or aluminum in the product
U.S.Tariff Cumulative Stacking Effect
With the various tariffs set to be imposed by the United States, certain goods shipped to the United States, will be subject to a Tariff Cumulative Stacking Effect (TCSE).
Chart 1: U.S. Tariffs Imposed on a Canadian Exporter
Revision Date: March 10, 2025
| Authority | Tariff Impacting a Canadian Exporter |
| Section 301 (Trade Act of 1974) | 25% on Chinese goods |
| IEEPA (International Emergency Economic Powers Act) | 0% (previously 10%) Tariff on Canadian crude oil & energy resources 25% Tariff on Canadian goods which are notย NAFTA โoriginatingโ ย (Duties will be suspended on USMCA-originating products of Canada and Mexico imported on or after 12:01 AM onย March 7, 2025) 10% Tariff on non-originating Potash 20% Tariff on Chinese goods (10% original rate + 10% Synthetic Opioid Supply Chain Amendment) |
| Section 232 (Trade Expansion Act of 1962) | 25% on Steel and Aluminum 10% on Derivatives 25% on the value of Steel and Aluminum Derivative on a product classified outside Chapters 73 & 76 |
Chart 2: Canadian Scenarios & the Tariff Impact
Revision Date: March 10, 2025
| Canadian Exporter Scenario | U.S. Tariff Impact on the Importer of Record into the United States |
| Scenario 1: Chinese Steel or Aluminum, From Canada into the U.S. | = Section 301 + IEEPA + Section 232 = 25% + 20% + 25% = 70% Tariff (in additional to applicable current U.S. duty rates) |
| Scenario 2: Chinese Steel or Aluminum, Derivative of Chapter 73 & 76, From Canada into the U.S. | = Section 301 +ย IEEPA + Section 232 = 25% + 20% + 10% = 55% Tariff (in additional to applicable current U.S. duty rates) |
| Scenario 3: Chinese Steel or Aluminum, Derivative outside Chapters 73 & 76, From Canada into the U.S. | = Section 301 + IEEPA + Section 232 = 25% + 20% + 25% (value of steel & aluminum component) = 70% Tariff (in additional to applicable current U.S. duty rates) |
| Scenario 4: Canadian Steel or Aluminum, Shipped to the U.S. | = IEEPA + Section 232 = 0% (if previously qualified under CUSMA) + 25% = 25% Tariff (in additional to applicable current U.S. duty rates) NOTE: ADD 25% IEEPA Tariff on Canadian goods which are notย NAFTA โoriginatingโ |
| Scenario 5: Canadian Steel or Aluminum, Derivative of Chapter 73 & 76, Shipped to the U.S. | = IEEPA + Section 232 = 0% (if previously qualified under CUSMA) + 10% = 10% Tariff (in additional to applicable current U.S. duty rate) NOTE: ADD 25% IEEPA Tariff on Canadian goods which are notย NAFTA โoriginatingโ |
| Scenario 6: Canadian Steel or Aluminum, Derivative outside Chapters 73 & 76, Shipped to the U.S. | = IEEPA + Section 232 = 0% (if previously qualified under CUSMA) + 25% (value of steel & aluminum component) = 25% Tariff (in additional to applicable current U.S. duty rates) NOTE: ADD 25% IEEPA Tariff on Canadian goods which are notย NAFTA โoriginatingโ |
| Scenario 7: Canadian crude oil & energy resources, Shipped to the U.S. | = IEEPA = 0% (if previously qualified under CUSMA) |
| Scenario 8: Non-Originating Potash from Canada, Shipped to the U.S. | = IEEPA = 10% |
Next Steps for a Canadian Company Shipping to the U.S.
In light of these challenges, Canadian companies who are acting as either the exporter, and/or the importer of record into the United States, are advised to take the following key steps to help adjust to this new trade environment.
- Perform a review of your product lines to determine which products are impacted and the financial impact made by these additional tariffs
- Evaluate your global sourcing & supply chain exposures for products that fall both, within and outside of H.S. Classification Chapters 73 and 76
- Collect and organize your valuation data, specific to your products with steel and aluminum derivatives
- If you have products that meet the Section 232 steel and aluminum exclusions, collect, organize and verify your country-of-origin documentation
- Stay informed on Customs Border Protectionโs direction, and updates with respect to these tariffs
- Assess potential mitigation strategies, such as supply chain restructuring, contract renegotiating, tariff engineering, or legal challenge opportunities
To stay updated on these Tariffs, please feel free to visit our website Blog page,
