⚠️ Active Tariffs
The US currently applies 25% tariffs on most Canadian goods and 10% on Canadian energy and potash under IEEPA authority. USMCA-qualifying goods retain 0% duty — but only if strict rules of origin are met.
Canada is the US's second-largest trading partner, with over $760 billion in two-way goods trade annually. For most of the past three decades, USMCA (and before it, NAFTA) kept duties near zero for qualifying goods. That changed in early 2025. Today, importers from Canada face a more complex tariff landscape than at any point since the original NAFTA was signed in 1994.
This guide breaks down the current rate structure, what qualifies for USMCA exemption, how to calculate your actual landed cost, and what categories of Canadian goods face the highest tariff exposure.
As of June 2026, there are three distinct tariff tiers for goods imported from Canada, determined by origin certification and product category:
| Category | Rate | Applies To |
|---|---|---|
| USMCA-qualifying goods | 0% | Goods meeting USMCA rules of origin with valid certification |
| Non-USMCA Canadian goods | 25% | Most goods that don't qualify or lack valid USMCA documentation |
| Energy & potash | 10% | Crude oil, natural gas, electricity, potash fertilizers |
| Steel & aluminum (Section 232) | 25% / 10% | Steel articles 25%, aluminum articles 10% — stacked on top of above |
The critical variable is USMCA qualification. If your Canadian supplier can provide a valid certificate of origin proving the goods meet USMCA rules, you pay 0%. If they can't — or if the documentation is incomplete — you're looking at 25%.
USMCA (the US–Mexico–Canada Agreement) grants duty-free treatment to goods that "originate" in North America. But "originating" means something specific — it's not simply where the product was manufactured or shipped from. There are two main tests:
Agricultural goods grown in Canada, natural resources extracted there, or goods made entirely from North American inputs qualify automatically. A Canadian wheat shipment, a barrel of Alberta oil, or a piece of lumber from British Columbia would all be "wholly obtained."
For manufactured goods that use some imported components, the product must undergo a meaningful change in tariff classification in North America — typically moving from one chapter or heading to another in the Harmonized Tariff Schedule. A Canadian automaker assembling cars from some Asian parts still qualifies if the transformation meets the threshold.
Many product categories require a minimum percentage of the product's value to come from North American inputs — typically 50–75% depending on the calculation method (net cost vs. transaction value). Automobiles face stricter requirements: core parts must be 75% North American content.
The documentation requirement is equally important. Importers must have a signed USMCA certificate of origin — either from the exporter, producer, or importer — on file at the time of entry. CBP can request it during a review, and missing paperwork means paying the 25% rate even if the goods technically qualify.
The tariff impact is not evenly distributed. Some sectors are largely sheltered by USMCA compliance; others are significantly exposed.
Consumer goods and retail products sourced through Canadian distributors that were originally manufactured in Asia are most exposed. A Canadian importer of Chinese electronics re-exporting to the US gets zero USMCA protection — the goods don't originate in North America, so the 25% applies in full.
Processed foods with global ingredient sourcing face similar exposure. A Canadian food manufacturer using ingredients from outside North America may not meet USMCA's regional value content threshold. Importers of specialty foods, snacks, and beverages from Canada should audit their supplier's origin documentation carefully.
Textiles and apparel have some of the strictest USMCA rules — "yarn-forward" requirements mean the yarn itself must be spun in North America. Canadian apparel brands often source fabric and yarn globally, which breaks the chain and forfeits USMCA status.
Automotive parts and vehicles — despite stricter USMCA content rules — remain largely duty-free because major automakers have invested heavily in North American supply chains. The integrated US–Canada auto sector qualifies overwhelmingly.
Lumber and forest products are wholly Canadian-origin goods and qualify easily. Note that softwood lumber has its own separate anti-dumping and countervailing duties (in place since 2002) that apply independently of the IEEPA tariffs.
Agricultural commodities — grains, livestock, dairy (within quota) — qualify as wholly obtained and remain largely duty-free under USMCA.
Your landed cost includes more than just the tariff. Here's the full formula for Canadian imports:
The Merchandise Processing Fee (MPF) applies to all formal entries: 0.3464% of the dutiable value, with a minimum of $32.71 and a maximum of $634.62 per entry. For Canadian goods specifically, there's a key detail: USMCA-qualifying goods are exempt from MPF. This is an additional cost saving — on top of the 0% tariff — for qualifying imports.
| Cost Element | USMCA Qualifying | Non-Qualifying (25%) |
|---|---|---|
| Invoice value | $50,000 | $50,000 |
| Import duty | $0 (0%) | $12,500 (25%) |
| MPF | $0 (exempt) | $173.20 (0.3464%) |
| Freight + insurance | $1,200 | $1,200 |
| Total Landed Cost | $51,200 | $63,873 |
The difference is $12,673 on a single $50,000 shipment — a 24.7% cost increase for non-qualifying goods. At scale, this is the difference between a profitable import operation and a margin-destroying one.
Canada responded to the US tariffs with retaliatory measures of its own. If your business exports to Canada or sources from US companies that supply Canada, these counter-tariffs create upstream pressure on pricing.
Canada's retaliatory tariffs are generally structured as 25% on a list of US-origin goods, targeting sectors with maximum political impact in the US: agricultural products (pork, dairy, orange juice), steel and aluminum products, and certain consumer goods. The scope and specific product lists shift as negotiations continue — importers should check the Canada Border Services Agency (CBSA) site for current lists before finalizing contracts.
For US importers buying from Canadian suppliers, the retaliatory tariffs matter indirectly: a Canadian manufacturer whose own costs have risen because they import US inputs may pass those costs upstream. Your Canadian supplier's input cost structure is worth understanding in price negotiations.
This is the single highest-leverage action. A properly completed USMCA certificate of origin eliminates the 25% tariff and the MPF. Ask your Canadian suppliers for origin certifications for every product you import. If they can't provide one, ask why — it may mean the goods don't truly originate in North America.
Tariff rates vary by HTS code. Misclassification doesn't just risk CBP penalties — it can mean overpaying on goods that qualify for lower rates or USMCA exemption. Use the USTariffCalc calculator to verify rates by HTS code before importing. See also our guide on how to calculate import duty for a full walkthrough.
Section 232 steel (25%) and aluminum (10%) tariffs apply to any product that is, or substantially contains, steel or aluminum — including downstream products like machinery, tools, and hardware. If your Canadian goods include significant metal content, confirm the Section 232 classification with a customs broker before assuming no surcharge applies. Review our import tariff rates by product guide for metal category specifics.
If your Canadian supplier's goods don't qualify for USMCA, you're effectively paying a 25% tax on every shipment. Use that as leverage: either negotiate a price reduction that partially offsets the tariff, require the supplier to restructure their supply chain for USMCA compliance, or explore whether sourcing from a US or Mexican supplier changes your total landed cost. Our landed cost comparison guide covers how to run this analysis.
Calculate Your Exact Duty on Canadian Imports
Enter your HTS code and shipment value. Get the precise tariff rate, MPF, and full landed cost in seconds.
Calculate Now →The 25% IEEPA tariffs on Canada were imposed under emergency authority, making them theoretically easy to reverse by executive action — no congressional vote required. The US and Canada launched formal trade negotiations in 2025, and there are active working groups on the tariff framework ahead of the scheduled 2026 USMCA joint review.
Scenarios range from full tariff removal for goods meeting USMCA rules (restoring the pre-2025 status quo) to a tiered structure that maintains some elevated rates on specific sectors. Importers planning medium-term sourcing strategies should build in scenario analysis: model your landed cost at 0%, 10%, and 25% and identify at what rate your Canadian sourcing strategy stops being competitive.
For current Section 122 tariff developments and their potential expiration, see our guide on Section 122 tariff expiration in July 2026. For the broader USMCA framework, our USMCA benefits guide covers the full rules of origin requirements and certification process in detail.
No. Goods that qualify under USMCA rules of origin pay 0% duty. Canadian energy products (oil, gas, electricity) and potash face a reduced 10% rate. The 25% applies to Canadian goods that don't meet USMCA origin requirements or lack the required certification documentation.
You need a signed USMCA certificate of origin from your Canadian exporter or producer. The certificate must state that the goods meet USMCA rules of origin. Ask your supplier directly. If they can't provide it, consult a licensed customs broker — they can review the HTS code and determine if the product's manufacturing process and inputs meet the applicable rule.
The $800 de minimis threshold still applies to Canadian goods — shipments under $800 in value are not subject to formal entry or duties. However, de minimis does not apply to commercial importations or when goods are part of a larger split shipment strategy. Personal purchases shipped directly to US consumers under $800 remain duty-free. See our de minimis guide for details.
Duty drawback allows recovery of duties paid if goods are later exported or destroyed. IEEPA tariff refunds are a separate question — there is currently no broad refund program for IEEPA Canada tariffs, unlike some Section 301 exclusion processes. Check the IEEPA tariff refund guide for current status.
Yes. Section 232 tariffs on steel (25%) and aluminum (10%) are applied in addition to any IEEPA tariff. A non-USMCA qualifying steel product from Canada could face 25% (IEEPA) + 25% (Section 232) = 50% combined duty. USMCA-qualifying steel still faces Section 232 tariffs — the USMCA exemption does not override Section 232 surcharges.