Canada Imposes Up to 50% Surtax on US Goods from Sept. 8

Canada introduced the United States Surtax Order (2026), applying surtax rates of 15%, 25%, or 50% on U.S.-origin goods effective September 8, 2026.

Canada’s government put an extra import tax of 15%, 25% or 50% on a list of U.S.-made goods, from cheese and furniture to milk powder and tools, starting Sept. 8, 2026.

The new tax is set out in the United States Surtax Order (2026), registered as SOR/2026-186 on Sept. 4, 2026¹. A surtax is an extra tax that customs collects on top of normal import duty.

In short, many U.S. goods now cost more to bring into Canada. The Canadian importer pays the surtax at the border, and the rate depends on the product.

Why did Canada tax U.S. goods from Sept. 8?

On Aug. 22, 2026, the United States put tariffs of 50% on a range of goods from Canada¹. It used Section 338 of its Tariff Act of 1930 and said Canada treated U.S. cars, alcohol and dairy unfairly¹. Canada rejects that claim and says its trade practices are fair.

How the two sides got here

50% tariffs on Canadian goods Aug. 22, 2026, under Section 338

Surtax of 15%, 25% or 50% On U.S. goods from Sept. 8, 2026

Tariffs changed, bans announced From Sept. 15 and Sept. 29, 2026

United States Canada

On Aug. 25, 2026, Finance Minister François-Philippe Champagne said Canada would match the U.S. tariffs "dollar for dollar, rate for rate"². The Canadian tax focuses on sectors such as steel, dairy, appliances, farm equipment, pulp and paper, and electronics².

Canada chose products that the U.S. hit with its Section 338 tariffs and its Section 232 tariffs³. For each product, the Canadian rate generally matches the U.S. rate on the same goods³. The Department of Finance says the goal is to help Canadian producers compete with U.S. products at home².

Which U.S. goods pay 15%, 25% or 50%?

The order puts each product code in one of three lists, called schedules¹. The rate depends on the list:

Schedule 1: 15% of the value for duty
Schedule 2: 25% of the value for duty
Schedule 3: 50% of the value for duty

Surtax by list, % of the value for duty

Schedule 3: milk powder, honey, furniture 50%

Schedule 2: cheese, appliances 25%

Schedule 1: forklifts, machinery 15%

The value for duty is the customs value of the goods, worked out under sections 47 to 55 of Canada’s Customs Act¹. Costs for transport after the goods start their direct journey to Canada are left out of this value³.

The 15% list is short and covers machinery items, such as forklift trucks and parts of air conditioners (codes 8427 and 8415)¹. The 25% list includes many kinds of cheese, such as cheddar, brie, gouda and mozzarella⁴. It also includes appliances and some steel and aluminum products².

The 50% list includes milk powder, whey, natural honey and sugar molasses⁴. The Finance department says it also covers furniture, clothing and some steel and aluminum products². Those metal goods previously faced a 25% Canadian counter-tariff².

How does CBSA collect the surtax on U.S. goods?

The Canada Border Services Agency (CBSA), which runs Canada’s borders, collects the surtax³. It explained the rules in Customs Notice 26-23, dated Sept. 7, 2026³. The surtax comes on top of other duties, including anti-dumping duty, an extra tax on goods sold below their normal price³.

CBSA example: a $150 good at the 25% surtax

Part	Rate	Charged on
Normal duty	None	Value for duty of $150
Surtax	25% ($37.50)	Value for duty of $150
GST	5%	$187.50, value plus surtax

The notice gives a worked example. A good has a value for duty of $150, no normal duty, and a 25% surtax³. The surtax is $37.50, and the 5% GST is then charged on $187.50³.

That point matters for costs. The GST, Canada’s federal sales tax, is charged on a value that includes the surtax³. So the real extra cost is a little higher than the surtax rate alone.

The surtax also applies to small parcels. It applies to shipments under the low-value "de minimis" limits and to goods sent by post or courier³. It covers both business imports and personal purchases³.

Which goods count as made in the United States?

The surtax applies only to goods that originate in the United States¹. A good counts as U.S. if it can be marked as a product of the United States under Canada’s marking rules for CUSMA countries¹. CUSMA is the trade agreement between Canada, the United States and Mexico.

Where the goods ship from does not matter. The surtax applies even when U.S. goods reach Canada from a third country³. Goods marked as from Puerto Rico, Guam, the Northern Mariana Islands, American Samoa or the U.S. Virgin Islands do not pay³.

For business shipments, importers must show where the goods come from. A commercial invoice can serve as proof of origin if it has the minimum details listed in CUSMA³. For personal goods, a "made in the U.S." mark is enough to make them U.S. goods³.

Which shipments escape the new Canadian surtax?

The order lists several exceptions¹. The surtax does not apply to:

goods in transit to Canada on Sept. 8, 2026
most goods under Chapters 98 and 99, the special customs codes
personal goods of Campobello Island residents back within 24 hours
goods with an Import for Re-Export Program permit

What escapes the surtax

Goods in transit on Sept. 8, 2026 With proof such as a bill of lading

Most Chapter 98 and 99 goods The special customs codes

Import for Re-Export Program goods When they have a permit

Steel derivative goods Pay only this order’s surtax, not both

Goods in transit must be on their way and in a carrier’s hands³. Importers need proof of transit, such as a bill of lading, cargo control papers or entry reports³. A CBSA officer may ask for this proof at any time³.

Some goods do not pay twice. If a good falls under both this order and the Steel Derivative Goods Surtax Order, only this order’s surtax applies³. The surtax is also cancelled for goods covered by the Akwesasne Residents Remission Order³.

Can importers get U.S. surtax money back?

Some importers can. Canada’s Duties Relief and Duty Drawback programs cover the surtax³. These programs let firms skip or recover duty on goods they later export⁵.

The order also widens an existing refund rule, the United States Surtax Remission Order (2025)¹. It now refunds this surtax on some goods used for health care, public safety and national defence¹. It also refunds it on goods used in Canada to make products, grow farm goods or package food and drinks¹.

The Finance department says Canada’s other counter-tariffs, including those on U.S. cars, stay in place². Importers can email the department about a remission request with "U.S. Remission" in the subject line⁵.

The U.S. side has already moved again. It changed its Section 338 tariffs from Sept. 15 and announced import bans on some Canadian products from Sept. 29, 2026⁵. Canada’s 15%, 25% and 50% rates stay on U.S. goods at the border under the order¹.

Sources

↩ United States Surtax Order (2026): SOR/2026-186 https://gazette.gc.ca/rp-pr/p2/2026/2026-09-23/html/sor-dors186-eng.html
↩ Canada announces targeted countermeasures and substantive … https://www.canada.ca/en/department-finance/news/2026/08/canada-announces-targeted-countermeasures-and-substantive-support-for-workers-and-businesses-in-response-to-us-tariffs.html
↩ Customs Notice 26-23: United States Surtax Order (2026). https://www.cbsa-asfc.gc.ca/publications/cn-ad/cn26-23-eng.html
↩ List of products from the United States subject to counter-tariffs …. https://www.canada.ca/en/department-finance/news/2026/08/list-of-products-from-the-united-states-subject-to-counter-tariffs-effective-september-8-2026.html
↩ Answers to common questions about U.S. tariffs https://www.tradecommissioner.gc.ca/en/market-industry-info/search-country-region/country/canada-united-states-export/us-tariffs/answers-common-questions-tariffs.html

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