New 25% Tariff Assessment on Steel

Changes to Steel Quotes

Information c/o: Department of Finance Canada

Effective December 26th, 2025, there will be changes to tariff rate quotas and a new 25% tariff assessment for steel and steel products applied from all countries. There are two separate changes.

Countries that don’t have a free trade agreement with Canada will be reduced from 50% to 20% of 2024 levels, with over-quota volumes continuing to face a 50% surtax. Countries that have a free trade agreement with Canada will see a reduction from 100% to 75% of 2024 levels, with over-quota volumes continuing to face a 50% surtax. Canada will continue to honor its existing CUSMA carve-out. As such, the United States and Mexico will continue to be exempted from this requirement.

25% Tariff Assessment

Initially, a list of steel derivative products will be assessed with a 25% Tariff.  It covers goods where steel contact holds a large portion of the full product value. The list will be updated to reflect changes in market conditions.

The temporary horizontal remission of counter-tariffs on U.S. steel used for manufacturing, processing, food and beverage packaging, or agricultural production will expire effective January 31, 2026, with the continued exception of goods used for the manufacturing of automobiles, auto parts, and aerospace products. The horizontal remission of counter-tariffs on aluminum products will also continue beyond January 31, 2026.
 
Importers will still be eligible to apply for remission under the remission framework published by the government on March 4, 2025, which provides for ongoing tariff relief in a narrow set of circumstances, for example, where inputs cannot be sourced domestically.

The Tariff Will Not Apply To:

• Goods that are in transit to Canada on the day on which tariffs come into force.
• Goods that are subject to a tariff under the China Surtax Order (2024), the United States Surtax Order (Steel and Aluminum 2025), the Order Imposing a Surtax on the Importation of Certain Steel Goods, or the Steel Goods and Aluminum Goods Surtax Order;
• Casual goods, as defined in section 2 of the Persons Authorized to Account for Casual Goods Regulations;
• Goods that are classified under a tariff item of Chapter 98 of the List of Tariff Provisions, even if the goods are otherwise classifiable under a tariff item set out in the schedule;
• Goods that are imported before July 1, 2026 for use in the manufacture of motor vehicles or chassis for motor vehicles or in the manufacture of parts of or accessories for motor vehicles or chassis for motor vehicles;
• Goods that are imported before July 1, 2026 for use in aircraft, ground flying trainers or spacecraft or in parts of aircraft, ground flying trainers or spacecraft;
• Utility wind towers, and sections of those towers, that are classified under tariff item 7308.20.00 and imported for installation in energy projects located west of the Ontario–Manitoba border; and
• Goods that are in transit to Canada on the day on which tariffs come into force

List of Steel Products Subject to 25% Tariff

The following provides a list of steel derivative products subject to the 25% tariff coming into effect on December 26th. Descriptions are included for illustrative purposes, with the scope established by the tariff classification numbers.

Why Is This Happening?

Toughen border measures to combat foreign steel dumping. Strong border enforcement is critical to prevent foreign steel dumping, including through mislabeling or mischaracterization, which threatens Canadian businesses and jobs. Effective enforcement requires up-to-date information, expertise, and resources. To meaningfully strengthen compliance and protect the integrity of Canada’s steel supply chain, the Government, through the Canada Border Services Agency (CBSA), is introducing new measures:

The CBSA will make it easier to receive and act on tips related to non-compliance involving steel goods. This includes enhancements to the secure Border Watch online portal, making it easier for individuals and businesses to provide information related to mis-declared information or other suspected non-compliance. Expanding this channel will support earlier identification of risks and more targeted enforcement activities.

The CBSA will work with the Canadian Steel Producers Association to establish recurring technical workshops that support effective enforcement. These sessions will focus on the technical characteristics of steel products, global supply-chain practices, and the information needed to support enforcement and compliance. Ongoing collaboration will help ensure CBSA officials remain informed about current industry practices and evolving global market conditions.

The CBSA’s newly established Market Watch Unit will prioritize timely updates on steel market prices. The Market Watch Unit analyses trade flows and identifies products that may be at greater risk of being dumped into Canada. The Unit will now prioritize updating normal values for steel products to reflect current production costs, export prices, and global steel market conditions. This will help ensure that trade remedy duties collected on imports are accurate and consistent with evolving global dynamics.

The CBSA will establish a dedicated steel trade compliance team focused exclusively on enforcement activities related to steel. This specialized team will conduct targeted reviews, compliance activities, and focused enforcement in the steel sector.