U.S. import duties on goods from Canada come in layers. Products that qualify under the United States-Mexico-Canada Agreement (USMCA) generally enter at their standard Harmonized Tariff Schedule rate, which is often zero. Goods that don’t qualify carry a 35% emergency surcharge on top of that base rate as of August 1, 2025. Canadian steel and aluminum face a separate 50% national security tariff regardless of USMCA status, and specific products like softwood lumber carry additional antidumping and countervailing duties. Rates have moved several times in 2025, so the current schedule should be verified before any shipment ships.
The 35% Emergency Surcharge and the USMCA Exemption
In February 2025, the President signed Executive Order 14193 imposing additional tariffs on Canadian goods under the International Emergency Economic Powers Act (IEEPA), citing illicit drug flows across the northern border. The initial rate was 25% on most products and 10% on Canadian energy resources, including crude oil, natural gas, refined petroleum products, and critical minerals.1Federal Register. Imposing Duties To Address the Flow of Illicit Drugs Across Our Northern Border
Those rates have escalated. As of August 1, 2025, non-USMCA-compliant Canadian goods face a 35% surcharge, and goods transshipped through other countries to dodge applicable duties face 40%. Energy and potash imports that don’t qualify under USMCA remain at 10%.2Congress.gov. Presidential 2025 Tariff Actions: Timeline and Status
The carve-out is critical. Goods that claim and qualify for USMCA preferential tariff treatment are exempt from these emergency tariffs entirely, an exception in place since March 7, 2025.3The White House. Fact Sheet: President Donald J. Trump Adjusts Tariffs on Canada and Mexico To Minimize Disruption to the Automotive Industry So USMCA compliance is now the dividing line between duty-free entry and a steep surcharge. If your Canadian product meets the rules of origin, it enters at the standard HTSUS rate. If it doesn’t, you pay the HTSUS base rate plus 35%.
Steel and Aluminum: A Separate Track
Steel and aluminum from Canada follow their own rules. Prior Section 232 exemption agreements were terminated in March 2025, and the rate was subsequently raised to 50% for most countries, Canada included. These national security duties apply regardless of USMCA status, meaning USMCA-compliant steel and aluminum shipments still pay them. Section 232 proclamations have been amended repeatedly through 2025, so importers of these metals should confirm the current rate with CBP before shipping.
How the Base Duty Rate Is Set
Before any surcharge or trade remedy kicks in, every import starts with a base rate set by the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS assigns a numerical classification code to every conceivable product based on its physical characteristics, composition, and function. The first step for any importer is identifying the correct code.4U.S. Customs and Border Protection. Harmonized Tariff Schedule – Determining Duty Rates
Base rates range from zero to significant percentages depending on category. Many industrial inputs and raw materials carry low or zero rates; finished consumer goods tend to carry higher ones. General Note 11 of the HTSUS provides the framework for applying USMCA preferential rates to qualifying Canadian and Mexican goods.5Harmonized Tariff Schedule. Harmonized Tariff Schedule
These base rates are the floor. The total duty on a Canadian import can stack: the HTSUS base rate, plus any IEEPA emergency tariff if non-USMCA-compliant, plus any antidumping or countervailing duties if the product is subject to a trade remedy order, plus Section 232 tariffs on steel and aluminum. A wrong HTSUS classification cascades into every layer above it.
Qualifying Under USMCA
Because USMCA compliance now determines whether a product faces the 35% surcharge, the rules of origin have never mattered more. A product doesn’t qualify for USMCA preference just because it shipped from a Canadian address. It has to be an originating good, meaning produced or substantially transformed within North America using sufficient regional content.6eCFR. 19 CFR Part 182 – United States-Mexico-Canada Agreement
The rules use two primary tests, sometimes in combination. A tariff shift test requires that the imported product fall under a different HTSUS heading than its non-originating inputs, proving meaningful transformation. A regional value content (RVC) test requires that a minimum percentage of the product’s value come from North American sources. The general RVC threshold is 60% under the transaction value method or 50% under the net cost method, though product-specific rules can be much higher.7Office of the United States Trade Representative. USMCA Chapter 4 – Rules of Origin
Passenger vehicles have the strictest thresholds. A car must meet a 75% RVC under the net cost method to qualify. Light trucks face the same 75% requirement. Heavy trucks must meet 70% by January 1, 2027, up from the earlier 64% threshold. These aggressive content requirements trip up importers who assume a Canadian-assembled vehicle automatically qualifies.7Office of the United States Trade Representative. USMCA Chapter 4 – Rules of Origin
Claiming the Preferential Rate
To claim USMCA benefits, the importer needs a certification of origin completed by the exporter, producer, or importer. The certification must include the certifier’s identity, the six-digit HS classification, a description of the goods, and the specific origin criterion the product satisfies. It can cover a single shipment or serve as a blanket certification for up to 12 months of identical goods.8Office of the United States Trade Representative. USMCA Chapter 5 – Origin Procedures
The importer bears full responsibility for the accuracy of the claim. CBP can request production records, supplier declarations, and cost breakdowns to verify a product genuinely meets the rules of origin. If the documentation doesn’t hold up, the importer loses the preferential rate retroactively and owes the full duty plus the IEEPA surcharge, potentially with interest and penalties.6eCFR. 19 CFR Part 182 – United States-Mexico-Canada Agreement
Product-Specific Trade Remedy Duties
Some Canadian products face additional duties designed to offset unfair pricing or government subsidies. These are separate from IEEPA tariffs and can stack on top of both the HTSUS base rate and the emergency surcharge.
Canadian softwood lumber is the most prominent example. The U.S. Department of Commerce has maintained both antidumping and countervailing duty orders on Canadian softwood for years. In the most recent administrative review covering 2023 imports, Commerce found countervailing duty rates ranging from 12.12% to 16.82%, with a rate of 14.63% for non-selected companies. Antidumping duty rates in a separate review ranged from 9.65% to 35.53%.9International Trade Administration. Commerce Department Announces Final Results of Softwood Lumber from Canada Countervailing Duty Administrative Review
Trade remedy duties apply to the specific products named in the order regardless of USMCA status. Importers bringing in goods subject to an antidumping or countervailing order must deposit estimated duties at entry, which are later adjusted during annual administrative reviews.
Federal Processing Fees
Beyond the duty itself, most commercial imports trigger processing fees that importers frequently overlook when budgeting.
Every formal entry requires a Merchandise Processing Fee (MPF). For fiscal year 2026, the rate is 0.3464% of the imported goods’ value, with a minimum of $33.58 and a maximum of $651.50 per entry. Manual filings incur an additional $4.03 surcharge.10U.S. Customs and Border Protection. Customs User Fee – Merchandise Processing Fees
Canadian goods arriving by water are also subject to a Harbor Maintenance Fee of 0.125% of cargo value. This fee applies only to commercial cargo loaded or unloaded from vessels at U.S. ports, so it doesn’t apply to shipments crossing by truck or rail at land border crossings.11eCFR. 19 CFR 24.24 – Harbor Maintenance Fee
Low-Value Shipments and Traveler Exemptions
The $800 de minimis exemption that once let low-value commercial shipments enter duty-free has been suspended. An executive order signed in July 2025, effective August 29, 2025, eliminated duty-free de minimis treatment for shipments from all countries, except those sent through the international postal network. Commercial shipments from Canada, regardless of value, are now subject to applicable duties, taxes, and fees.12The White House. Suspending Duty-Free De Minimis Treatment for All Countries This is a significant change for e-commerce sellers and small importers who previously relied on Section 321 to bring Canadian goods in without formal entry paperwork.
Travelers returning from Canada still get personal duty-free exemptions, which are separate from the suspended commercial de minimis rule. If you’ve been in Canada for at least 48 hours, you can bring back $800 worth of goods without paying duty.13U.S. Customs and Border Protection. Types of Exemptions
For shorter trips under 48 hours, or if you’ve already used your full exemption within the past 30 days, the exemption drops to $200. The $200 threshold works differently: if you exceed $200, duty applies to the full value of everything you’re bringing back, not just the amount over the limit. With the $800 exemption, you pay duty only on the excess.13U.S. Customs and Border Protection. Types of Exemptions
Penalties for Getting the Numbers Wrong
False or misleading statements on import documents carry civil penalties that scale with the level of culpability, in three tiers:
- Negligence: the penalty caps at the lesser of the merchandise’s domestic value or two times the duties the government lost. If the violation didn’t affect duties owed, the cap is 20% of the dutiable value.
- Gross negligence: the cap rises to the lesser of domestic value or four times the lost duties. Where no duty impact occurred, the penalty can reach 40% of the dutiable value.
- Fraud: the maximum penalty equals the full domestic value of the merchandise.
14Office of the Law Revision Counsel. 19 USC 1592 – Penalties for Fraud, Gross Negligence, and Negligence These penalties apply to errors in classification, valuation, country of origin, and USMCA claims. The difference between a negligence case and a fraud case often comes down to record-keeping. An importer with thorough, good-faith documentation who makes an honest classification error is in a far better position than one who can’t produce records at all. All import records must be maintained for at least five years from the date of entry.15eCFR. 19 CFR 163.4 – Record Retention Period
In the current tariff environment, USMCA qualification disputes have become high-stakes. A reclassification from USMCA-compliant to non-compliant doesn’t just add the standard duty. It triggers the 35% IEEPA surcharge retroactively, which can turn a routine classification disagreement into a six-figure liability on a single shipment.