If you’re trying to figure out if you'll be hit with extra costs at the border today, the answer isn't a simple yes or no. It’s more of a "yes, but only for certain things." Honestly, the trade relationship between Canada and the U.S. has been a total roller coaster over the last year. One minute we're staring down a full-blown trade war, and the next, there’s a quiet truce—well, mostly quiet.
Right now, in early 2026, we are in a bit of a split reality. If you’re importing consumer electronics, furniture, or grocery staples like orange juice and peanut butter, you can probably breathe a sigh of relief. Most of the retaliatory "tit-for-tat" tariffs that Canada slapped on American goods in early 2025 were actually wiped away back in September. Prime Minister Mark Carney (who took over from Trudeau) decided to play the "de-escalation" card to save the Canadian economy from a tailspin.
But don't get too comfortable. If you’re in the heavy industry game—steel, aluminum, or cars—the situation is still pretty ugly.
Which Canadian Tariffs Are In Effect Today?
The big ones that haven't moved are what people call the "Sectoral Surtaxes." Canada kept these in place because the U.S. is still taxing Canadian steel and aluminum under Section 232 "national security" justifications.
Here is the breakdown of what is currently active:
- Steel and Aluminum: There is still a 25% surtax on a wide range of U.S. steel and aluminum products. This includes everything from heavy pipes to certain types of sheeting used in construction.
- The Auto Sector: This is the big one for Ontario and Michigan. Canada is still maintaining a 25% tariff on U.S.-made vehicles that don't meet the strict "rules of origin" under CUSMA (the trade deal formerly known as NAFTA).
- Steel Derivatives: Just a few weeks ago, on December 26, 2025, Canada actually expanded its reach. New 25% tariffs kicked in on "steel-derivative" products like wind towers, certain bridge sections, and even some types of screws and cables.
Basically, if it’s made of metal and comes from an American factory, there’s a high chance you’re paying a quarter more for it than you would have two years ago.
The "Greenland" Factor and New Threats
Just when everyone thought we were settling into a stable, albeit tense, trade environment, President Trump threw a wrench in the gears again. Just this weekend—Sunday, January 18, 2026—news broke that Trump is threatening a new round of 10% tariffs on European countries over a dispute about Greenland.
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Why does this matter for Canada?
Because Peter MacKay and other trade experts are already warning that Canada could be next. If Canada gets caught in the crossfire of this "Arctic sovereignty" dispute, those 25% tariffs we thought were gone could come roaring back. Prime Minister Carney has already expressed "concern" from Qatar, where he's currently trying to drum up investment to diversify Canada’s trade away from the U.S.
It’s a mess.
One day you're trading freely, and the next, a Truth Social post changes the cost of your supply chain.
What About the 10% Baseline Tariff?
You might remember the "Liberation Day" tariffs or the 10% across-the-board tax Trump wanted to put on every single thing coming into the U.S.
For a few months in 2025, that was the law of the land. It sent prices for Canadian lumber and energy through the roof. However, thanks to some intense legal battles in the U.S. Court of International Trade, those broad "emergency" tariffs were mostly struck down for CUSMA partners.
Currently, as long as a product is "CUSMA-compliant"—meaning it was actually built in North America with North American parts—it usually crosses the border duty-free. But the definition of "compliant" is getting tighter. The U.S. is obsessed with making sure China isn't "back-dooring" parts through Canada.
The Softwood Lumber Headache
We can't talk about are Canadian tariffs in effect without mentioning the never-ending softwood lumber saga. This is the "zombie" of trade disputes; it never stays dead.
As of late 2025, Canadian lumber exporters are facing some of the highest duties in history—often totaling over 35% when you combine the "anti-dumping" duties and the special surtaxes. This is why building a deck in a Chicago suburb currently costs a small fortune.
How to Protect Your Business Right Now
If you're a business owner or a logistics manager, "waiting and seeing" is a bad strategy. The rules are changing monthly. Here’s what you actually need to do:
1. Audit your "Rules of Origin" Documentation. Don't just assume your product is CUSMA-exempt because you bought it from a guy in Buffalo. You need the paperwork to prove where the raw materials came from. If you can't prove it, the CBSA (Canada Border Services Agency) will happily charge you that 25% surtax.
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2. Watch the January 31 Deadline. There’s a massive "remission" period ending on January 31, 2026. Up until now, certain companies were allowed to skip paying tariffs on U.S. steel if they could prove they needed it for food packaging or agricultural equipment. That's about to expire for many sectors. If you haven't applied for an extension, your costs are about to jump on February 1.
3. Use the Canada Tariff Finder. The government’s official "Tariff Finder" tool is actually pretty decent. It was updated for 2026. You can plug in your HS (Harmonized System) code and see exactly what the rate is today.
4. Check for "De Minimis" Changes. The U.S. essentially killed the $800 duty-free limit for many shipments. If you're shipping small parcels into the States, you're likely paying duties on every single one now. Canada hasn't fully retaliated on the "De Minimis" front yet, but it's on the table for the upcoming CUSMA review in July.
Looking Ahead to July 2026
Everything we see right now is just the warm-up. July 1, 2026, is the "Joint Review" of the CUSMA agreement. Trump has already called the deal "irrelevant" during his visit to the Ford plant in Dearborn just a few days ago.
He wants to tear it up. Canada wants to keep it.
This means the current "sectoral" tariffs on steel and autos aren't going anywhere. In fact, they are the bargaining chips for the massive fight coming this summer. If you are planning long-term contracts for late 2026, you should probably bake a 10% to 25% "uncertainty tax" into your pricing.
It’s not a fun time to be an importer, but being informed is the only way to keep your margins from disappearing. Keep a close eye on the CBSA Customs Notices—they are the only source of truth when the political rhetoric gets too loud.
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Actionable Next Steps:
- Verify the HS codes for your top five most imported/exported items to check for new surtaxes.
- Review your Supply Chain Remission status before the January 31st expiration date.
- Consult with a Customs Broker specifically about "CUSMA Rules of Origin" to ensure you aren't overpaying on goods that should be duty-free.