What is the current US tariff rate on Canadian goods?

For IEEPA tariffs, non-CUSMA goods face 35%, while non-CUSMA energy and potash face 10%. Goods transshipped to evade those duties face 40%. CUSMA-compliant goods are generally exempt from the IEEPA layer.

Are CUSMA-compliant goods exempt from US tariffs?

CUSMA-compliant goods are exempt from the IEEPA Canada tariff. Section 232 steel and aluminum duties still apply. Section 232 auto duties have separate CUSMA-linked rules for US-content treatment and auto-parts timing.

What happened to the US$800 de minimis exemption?

Effective August 29, 2025, duty-free de minimis treatment was suspended for shipments not covered by 50 USC. 1702(b). Non-postal shipments now require ACE entry filing, while international postal shipments follow a separate duty collection process.

When is the CUSMA 2026 review?

July 1, 2026. Under USMCA/CUSMA Article 34.7, the parties meet for joint review. If all three confirm extension in writing, the agreement extends 16 years. If not, annual reviews continue until 2036.

How can Canadian businesses reduce tariff costs?

Certify CUSMA compliance, audit your supply chain for rules of origin, use CBSA duty relief programs, diversify markets beyond the US, and work with a customs broker.

US Tariffs on Canadian Goods in 2026: What Shippers Need to Know

You ship goods to the United States. Your costs just went up. Maybe 10%, maybe 50%, depending on what you sell and whether your paperwork is in order.

Since March 2025, US tariffs on Canadian goods have expanded and reshaped cross-border trade. More than US$2 billion in goods and services still crosses the border every day.

The rules governing that trade changed materially. Some businesses are absorbing the hit. Others are passing costs to customers or restructuring supply chains.

Source: Department of Finance Canada tariff response release.

Here is what you need to know about current US tariff rules, which products are affected, and what you can do about it.

Three Tariff Frameworks, Not One

The biggest source of confusion: US tariffs on Canadian goods don't come from a single policy. Three separate legal frameworks overlap, each with different rates and exemption rules.

IEEPA Tariffs (Broad Tariff on Canadian Goods)

Imposed under the International Emergency Economic Powers Act, citing fentanyl trafficking. These are the tariffs that affect the widest range of Canadian products.

Section 232 Tariffs (National Security)

These target specific materials and products. CUSMA compliance does not help here.

Current high-impact Section 232 categories:

Steel: 50% (effective June 4, 2025).
Aluminum: 50% (effective June 4, 2025).
Automobiles: 25% (effective April 3, 2025).
Auto parts (non-CUSMA): 25% (effective May 3, 2025).
Softwood lumber/timber: 10% (effective October 14, 2025).
Kitchen cabinets and vanities: 50% as of January 1, 2026.
Upholstered wooden furniture: 30% as of January 1, 2026.

Source: White House Section 232 steel and aluminum action.
Source: White House Section 232 autos action.
Source: White House Section 232 timber and derivative products action.

Anti-Dumping and Countervailing Duties (Softwood Lumber)

Canadian softwood lumber faces its own layer. In the 2025 final administrative reviews, the US Department of Commerce reported non-selected company rates of about 21% for antidumping and about 15% for countervailing. Combined, that is roughly 35% for many exporters. Add the 10% Section 232 softwood duty and total duty exposure rises above 45%.

!US tariff rate comparison by category.

The CUSMA Exemption: Your Most Important Tool

For most Canadian exports, CUSMA compliance is the difference between 0% and 35%. The math is straightforward.

A $100,000 shipment of manufactured goods without CUSMA certification: $35,000 in tariffs. The same shipment with a valid certification of origin: $0.

The exemption has been in place since March 6, 2025, when the White House carved out qualifying USMCA goods from the Canada IEEPA duties.

Canada now describes the US approach as allowing most Canadian goods to enter tariff-free under CUSMA. That does not mean automatic exemption. Importers still need valid origin qualification and claims.

Source: White House March 6, 2025 amendment for USMCA carve-out.
Source: Government of Canada response to US tariffs.

If you haven't certified your goods yet, you're overpaying on every shipment. Our CUSMA compliance guide walks through the certification process, rules of origin calculations, and the mistakes that void eligibility.

One critical caveat: CUSMA does not remove Section 232 exposure in most high-risk categories. Steel and aluminum are the clearest examples. Autos and auto parts have their own Section 232 rules that still create tariff exposure depending on content and classification.

Which Industries Are Hit Hardest

The tariff burden falls unevenly across Canadian sectors.

Steel and Aluminum

Steel and aluminum remain among the most exposed categories. The Section 232 rate moved to 50% in June 2025. There is no broad CUSMA carve-out for these tariffs.

Automotive

The 25% auto tariff has important nuance. The March 26 proclamation allows specific USMCA/US-content treatment for qualifying vehicles. It also places qualifying auto parts under a separate implementation process. Review product-specific treatment before quoting landed cost.

Softwood Lumber

Lumber faces overlapping exposure: Section 232 duties plus anti-dumping and countervailing duties. This overlap is why total landed duty can exceed 45% for many exporters.

Agriculture

Canola is about a $9 billion export market to the US. Potash producers supply about 85% of US demand. Non-CUSMA agricultural goods face 35%, though most agricultural products can qualify for CUSMA treatment with valid certification.

Source: Canola Council of Canada on tariff impacts.

The De Minimis Exemption Is Gone

On August 29, 2025, the White House order suspending duty-free de minimis treatment for all countries took effect.

For non-postal flows, prior de minimis shipments now need ACE filing and applicable duties. International postal shipments follow a separate duty collection method under the same order, including specific per-item duty options during a transition window.

Source: White House order suspending duty-free de minimis treatment for all countries.

For small eCommerce sellers shipping individual orders to US customers, this change materially increases compliance workload and landed-cost variance.

If you sell direct-to-consumer across the border, you have three options. Certify CUSMA compliance on each shipment. Establish US-based fulfillment. Or absorb higher per-order costs.

How Canadian Businesses Are Responding

!Tariff impact snapshot for Canadian businesses.

The numbers paint a clear picture of adaptation under pressure.

According to CFIB surveys of over 3,300 Canadian small businesses.

63% report higher expenses.
53% report reduced profits.
19% say they cannot survive more than 6 months at current tariff levels.
1 in 4 have passed cost increases directly to customers.

A BDC survey of 540 entrepreneurs found businesses affected by tariffs were 7x more likely to expand into non-US markets. They were 6x more likely to implement cost-cutting measures. They were 5x more likely to offer new products outside tariff scope.

Source: CFIB tariffs research hub.
Source: BDC survey on tariff adaptation.

Many Canadian SMEs are already diversifying away from sole US dependence, using domestic and non-US markets to reduce tariff concentration risk.

The businesses adapting fastest share a pattern: they verified CUSMA compliance first, then moved to diversify markets and restructure supply chains.

What You Should Do Now

1. Verify CUSMA Compliance

If your goods qualify under CUSMA and you haven't certified, you're leaving money on the border. Most Canadian goods can still enter tariff-free if they properly qualify and claim preference. The certification process requires 9 data elements.

For shipments you've already made without claiming CUSMA preference, you may be able to claim retroactive refunds. Talk to your customs broker.

2. Audit Your Supply Chain

Map where your materials originate. Rules of origin are product-specific. For many products, de minimis treatment can allow up to 10% non-originating content, but that does not apply universally. If your rule requires regional value content, calculate using the method required for your product.

Get written declarations from suppliers confirming their materials' originating status. Your CUSMA claim is only as strong as your supply chain documentation.

3. Use Government Relief Programs

Several programs exist to offset tariff costs:

CBSA Duties Relief Program: Import goods without paying tariffs if they're eventually re-exported.
CBSA Duty Drawback Program: Claim refunds on tariffs paid for goods that are later exported.
BDC $500M financing facility: Loans and advisory services for tariff-affected businesses.
Large Enterprise Tariff Loan Facility: $500M for larger businesses needing tariff-related liquidity.

The federal government also deferred corporate income tax and GST/HST remittances from April to June 2025. The federal tariff support announcement estimated this freed up $40 billion in liquidity.

Source: Department of Finance tariff support announcement.

4. Diversify Your Markets

If 80% of your revenue comes from the US, your business is exposed to policy risk you can't control. Export Development Canada offers trade credit insurance, financing, and market intelligence for businesses expanding into the EU, Asia, or Latin America.

Source: Export Development Canada on tariff impacts.

Canada has signed or is negotiating trade agreements with the EU (CETA), the UK (Canada-UK TCA), the Indo-Pacific (CPTPP), and several bilateral deals. These markets offer tariff-preferential access that the US market no longer guarantees.

5. Prepare for the July 2026 CUSMA Review

USTR confirms the Joint Review date as July 1, 2026. Under Article 34.7, the parties can extend the agreement for another 16 years through written confirmation.

Source: USTR notice requesting comment for USMCA Joint Review.

If no extension is confirmed at the first review, annual reviews continue until 2036. That keeps trade-policy uncertainty elevated for cross-border planning.

Businesses that depend on the CUSMA tariff exemption should prepare for three scenarios. Those scenarios are CUSMA extended as-is, CUSMA modified with tighter rules of origin, or CUSMA allowed to sunset. The third scenario would expose virtually all Canadian exports to 35% tariffs.

Get your CUSMA documentation in order now, regardless of review outcomes. Certified businesses are protected under the current agreement. Uncertified ones are exposed today.

6. Work with a Customs Broker

The tariff environment changes frequently. Since March 2025, tariff rates, product scope, and exemptions have changed multiple times through executive orders and proclamations.

A customs broker with cross-border expertise can verify your CUSMA certification. Brokers can catch HS code errors before they cost you. They can also flag rate changes that affect your products.

A Timeline of Key Tariff Actions

For reference, here are major tariff changes since the current trade conflict began.

March 4, 2025: 25% IEEPA tariff on Canadian goods and 10% on energy.
March 6, 2025: CUSMA-compliant goods exempted from IEEPA tariffs.
March 12, 2025: 25% Section 232 tariff on all steel and aluminum imports.
April 3, 2025: 25% Section 232 tariff on automobiles.
May 3, 2025: 25% Section 232 tariff on non-CUSMA auto parts.
June 4, 2025: Steel and aluminum tariffs doubled to 50%.
August 1, 2025: IEEPA tariff on non-CUSMA goods raised to 35%.
August 29, 2025: De minimis exemption removed.
October 14, 2025: 10% tariff on softwood lumber and 25% on cabinets and furniture.
January 1, 2026: Section 232 wood rates increased to 30% for upholstered wooden products and 50% for kitchen cabinets/vanities.

This situation remains fluid. Verify current treatment in the latest White House presidential actions, the US Harmonized Tariff Schedule, and your broker's current CBP implementation guidance.

Source: White House presidential actions index.
Source: US Harmonized Tariff Schedule.

Where This Leaves Canadian Exporters

Tariff risk for Canadian exporters in 2026 comes down to two variables: what you ship and whether you've done the paperwork.

CUSMA-compliant goods cross duty-free, while non-compliant goods pay 35%. Steel and aluminum pay 50% regardless. The de minimis exemption is gone. The CUSMA review in July could change everything again.

The businesses navigating this best are the ones that certified early, diversified deliberately, and kept their freight documentation current.

RTSI provides customs support coordination and freight forwarding for cross-border shipments between Canada and the US. If you need freight support and broker-partner coordination for CUSMA certification, tariff classification, or duty-relief review, contact our team.