Canada-U.S. Trade

No, it is our understanding your goods are exempt from the new tariffs if they’re in their final mode of transit when the tariffs take effect.

The 25% U.S. imposed tariffs on Canadian products will increase the costs of goods imported into the U.S. from Canada. These tariffs are paid by the importer (typically U.S.-based businesses) to U.S. Customs and Border Protection (USCBP).

There are currently no exceptions or exemptions, other than energy resources from Canada will have a lower 10% tariff.

De minimis treatment allows certain low-value imports (under $800) to enter the U.S. without being subject to tariffs or duties. The Executive Order restricts the use of this treatment for imports from Canada, Mexico, and China, meaning these low-value goods will now be subject to tariffs, even if their value is below $800.

While CUSMA eliminates most tariffs on goods traded between Canada, the U.S., and Mexico, it does not prevent the application of certain tariffs outside the agreement. In fact, CUSMA includes a clause on essential security, which states that nothing in the agreement precludes any of the parties from applying measures that it considers necessary for the fulfilment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests.

For this reason, the U.S. can impose tariffs national security reasons.

No, tariffs are taxes imposed on physical goods as they cross the border. They do not apply to intangible property, such as software or technology licenses, or to cross-border services.

No, goods that are already in transit to Canada when the tariffs take effect will be exempt.

Free Trade Agreements (FTAs), like Canada-United States-Mexico Agreement (CUSMA), include provisions to ensure goods benefit from the most advantageous tariff treatment. While many products imported from the U.S. are not subject to tariffs or duties, some items may still be. To determine whether your goods qualify for duty-free treatment under CUSMA, they must meet the specific rules of origin requirements and be supported by proper documentation, such as a certificate of origin.

You can use the Canada Tariff Finder to look up your HS Code and determine applicable duties. However, for the most accurate and reliable guidance, it’s always best to consult with a customs broker.

In response to the U.S. imposing 25% tariffs on Mexican imports, Mexican President Claudia Sheinbaum initially ordered retaliatory tariffs against the U.S.

President Sheinbaum engaged in discussions with U.S. President Donald Trump, which led to an agreement to pause the U.S. tariffs for one month. In exchange, Mexico committed to deploying 10,000 National Guard troops to the U.S.-Mexico border to combat drug trafficking, particularly fentanyl, and to address illegal immigration.

No. Goods that are simply transiting through the U.S. on their way to Mexico should not be impacted by tariffs. As long as the goods do not undergo any changes or enter U.S. commerce, they are not subject to the U.S. tariffs. However, if the goods are processed or enter the U.S. market before continuing to Mexico, they may be subject to the applicable tariffs.

Canadian governments need a unified and proactive response to minimize harm to businesses and the economy. Governments must focus on reducing the tax burden, cutting red tape, addressing internal trade barriers, and strengthening border measures to help small businesses stay competitive.

Canada has 15 free trade agreements (FTAs) covering 51 countries¹. These agreements provide Canadian businesses with preferential market access, reduced tariffs, and stronger trade rules. Here’s an overview of some of Canada’s key FTAs:

Explore Canada’s other free trade agreements here.

¹ Global Affairs Canada (GAC), Canada’s State of Trade 2022: The Benefits of Free Trade Agreements: A review of trade and investment in the previous year and a look at how free trade agreements have benefitted Canada.