If you walked into a grocery store in Toronto or Vancouver back in early 2025, you probably noticed the price of orange juice and peanut butter spiking almost overnight. That wasn't just "inflation" in the general sense. It was the opening salvo of a messy trade spat. For a few months there, Canada slapped massive 25% duties on everything from Ohio-made appliances to Kentucky bourbon. It was chaotic.
But things have shifted. As of January 2026, the landscape of tariffs Canada has on US imports looks a lot different than the "everything is taxed" vibe of last year.
Most of those retaliatory taxes on consumer goods? Gone. Prime Minister Mark Carney's government wiped out the 25% surtax on roughly $44 billion worth of American products back in September 2025. They did it to cool down inflation and basically extend an olive branch while CUSMA (the Canada-United States-Mexico Agreement) hung in the balance. However, if you think the trade war is totally over, you haven't looked at a shipment of steel lately.
The Big Three: Steel, Aluminum, and Cars
Even though Canada played nice by removing tariffs on coffee and sleeping bags, they kept the "heavy hitters" in place. If it’s heavy, made of metal, or has four wheels and wasn't built under specific trade rules, it's likely getting hit at the border.
Specifically, Canada still maintains a 25% tariff on:
- US Steel: This covers billions in flat-rolled products, pipes, and tubes.
- US Aluminum: Raw aluminum and various alloys are still under the gun.
- Non-CUSMA Vehicles: If a car is imported from the US but doesn't meet the strict "North American content" rules of the trade deal, Canada hits it with a 25% tax.
Why keep these? Honestly, it's because the US still has its own Section 232 tariffs on Canadian metals. Ottawa's stance is basically: "We'll stop taxing your steel when you stop taxing ours." It’s a classic standoff.
The End of the "Free Pass" for Steel
There’s a new wrinkle that just started this month. For most of 2025, many Canadian manufacturers could get a "remission"—basically a refund—on the tariffs they paid for US steel if they could prove they needed it for their factory or for food packaging.
That window just slammed shut. As of January 31, 2026, those broad remissions are expiring. If you’re a Canadian company using American steel to make soup cans or tractors, you’re now paying the full 25% surtax without a rebate. The only people still getting a break are those in the auto parts or aerospace sectors, and even their "free pass" is set to vanish in June 2026.
Dairy: The Fight That Never Ends
You can't talk about tariffs Canada has on US goods without mentioning milk. This is the "forever war" of North American trade.
Canada uses a system called "supply management." It’s a bit of a fortress. To keep domestic farmers profitable, Canada limits how much dairy can come in from the US. Anything over a certain quota gets hit with eye-watering tariffs—we’re talking 200% to 300%.
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The US has challenged this through CUSMA panels twice now. They won once, Canada won once. In early 2026, the tension is back at a boiling point because the US Trade Representative, Jamieson Greer, has flagged dairy as a "must-fix" issue before the CUSMA joint review this July.
The CUSMA "Compliance" Loophole
Here is something most people get wrong: not every American product is taxed. In fact, most aren't.
Under the CUSMA agreement, if a product is "originating" (meaning it’s actually made in the US with North American parts), it usually enters Canada duty-free. The tariffs Canada has on US imports mostly target "non-compliant" goods or are specific "surtaxes" added on top as retaliation for US trade moves.
But the definition of "made in the USA" is getting stricter. The Canada Border Services Agency (CBSA) has significantly ramped up audits this year. They are looking closer than ever at paperwork to make sure a company isn't just shipping Chinese steel through a warehouse in Buffalo to avoid the new 25% "steel derivative" tariffs that kicked in on December 26, 2025.
What’s New for 2026?
- Steel Derivatives: A new 25% global tariff (including the US) now applies to things like screws, cables, and even wind towers if they contain high steel content.
- Lower Quotas: Canada slashed the "Tariff Rate Quotas" for steel. This means the amount of steel that can come in without the 50% "over-quota" tax is much, much smaller now.
- The "Buy Canadian" Policy: While not a tariff per se, the federal government now prioritizes Canadian steel and lumber for any contract over $25 million. It’s a "soft" barrier for US firms.
Why This Matters for Your Wallet
If you’re a business owner or just someone who likes buying American-made gear, the "September Repeal" was great news. It meant you didn't have to pay extra for that US-made fridge or lawnmower anymore.
However, the "Ironman" stance Canada is taking on steel and aluminum means construction costs and manufacturing overhead remain high. If a Canadian builder is using US-sourced beams, that 25% cost is being passed straight to the homebuyer.
The biggest risk on the horizon? The July 2026 CUSMA Review.
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The three countries (US, Canada, Mexico) have to decide if they want to extend the trade deal for another 16 years. If the US decides the deal is "irrelevant"—as some in the Trump administration have suggested—we could see a return to the "Phase 1" tariffs where almost every American consumer good gets taxed at the Canadian border again.
Actionable Steps for Navigating 2026 Trade
- Verify Origin: If you are importing, don't just assume it's duty-free. Ensure your US supplier provides a formal CUSMA Certificate of Origin. Without it, you’re paying the MFN (Most Favored Nation) rate or higher.
- Watch the Remission Deadlines: If you rely on US steel, your costs likely jumped on January 31. Re-evaluate your supply chain now before the aerospace and auto remissions expire in June.
- Monitor the "Steel Derivative" List: Check the latest HS codes (Harmonized System). Simple items like screws or bolts that were "safe" last year might now fall under the new 25% derivative surtax.
- Budget for the Review: The volatility around the July CUSMA review means currency markets will be jumpy. Hedge your USD purchases if you’re a Canadian business to avoid getting burned by a weakening Loonie.
Trade between these two neighbors is usually a smooth machine, but right now, it’s got some serious sand in the gears. Staying on top of which specific "surtaxes" are active is the only way to avoid a nasty surprise from the CBSA.