Canada splits US steel & aluminum surtax: raw metals now 50%, finished goods stay 25%
An order amending the United States Surtax Order (Steel and Aluminum 2025) creates a two-tier surtax structure, moving most primary/raw steel and aluminum products (flat-rolled steel, coils, wire rod, aluminum ingots, bars, tubes) to a 50% surtax while finished articles keep the existing 25% rate. Goods already in transit to Canada on the day the change takes effect keep the surtax rate that applied before, so importers should check bills of lading and shipment dates carefully.
What happened
The Governor in Council amended the United States Surtax Order (Steel and Aluminum 2025) to split the surtax into two rate tiers instead of one. Goods classified in the new Schedules 1 and 2 remain surtaxed at 25% of value for duty, while goods newly listed in Schedules 1.1 and 2.1 are surtaxed at 50% (s.1(1.1)(a)-(b)). The rule also applies to goods 'otherwise classifiable' under these tariff items even if entered under a different Chapter 98/99 provision listed in new Schedule 3 or 4 (s.1(1)(b)-(c)).
Who is affected
The 50% tier (Schedule 1.1) covers primary aluminum forms — unwrought aluminum, bars, rods, profiles, wire, plates, sheet, foil, tubes, pipes and fittings across HS headings 7601-7616. The 50% steel tier (Schedule 2.1) is broad, covering flat-rolled products, bars, angles, wire rod, rails, pipe, tube, and structural shapes across HS Chapters 72 and much of Chapter 73. The 25% tier is now narrower: only aluminum castors and fittings (7615.10, 7615.20) for aluminum, and a shorter list of finished steel articles — fasteners, chain, tanks, structures, kitchenware and similar goods under headings 7320-7324 — for steel.
Exemptions and the in-transit exception
Goods classified under Chapter 98 or 99 tariff items not specifically listed in the new Schedules 3 or 4 remain excluded from the surtax even if they would otherwise fall under Schedule 1, 1.1, 2 or 2.1 (s.2(a) and (a.1)). Separately, goods already in transit to Canada on the day this Order comes into force are not hit with the new (higher) rate — they remain subject to whatever surtax rate applied to them the day before (s.1(1.2)). This is the key relief provision for shipments already en route when the 50% tier kicks in.
The refund angle
Importers who had shipments in transit on the effective date but were assessed the new 50% rate at the border — rather than the lower rate that applied before the change — have grounds to seek a correction or refund of the difference, since s.1(1.2) explicitly preserves the pre-existing rate for in-transit goods. Anyone who paid surtax on affected tariff items around the effective date should check the exact transit and release dates against their commercial invoices and bills of lading.
What importers should do now
Reclassify current and planned US-origin steel and aluminum shipments against the new Schedule 1, 1.1, 2 and 2.1 tariff item lists to confirm which rate applies — many primary-form products have moved from 25% to 50%. Check whether any Chapter 98/99 remission or special classification claim is affected by the narrower Schedule 3/4 lists (s.2(a), (a.1)). Confirm the coming-into-force date against the United States Surtax Order (2026), since this Order's effective date is tied to that order's commencement or the September 4, 2026 registration date, whichever is later (s.4).