Canada Removes Tariffs on U.S. Goods Certified Under CUSMA

Effective September 1, 2025, Canada will remove its 25% retaliatory tariffs on United States goods that qualify as originating under the Canada-United States-Mexico Agreement (CUSMA), as announced by Prime Minister Mark Carney. However, Canadian tariffs on U.S. steel, aluminum and auto imports will remain in effect.

Background

On March 4, 2025, Canada imposed 25% retaliatory tariffs on an initial select list of U.S. imports worth C$29.8-billion (referred to as the Phase 1 list of goods). These retaliatory tariffs were imposed after the U.S. imposed a 25% tariff on all products of Canada except energy products, which were subject to a 10% tariff.

Shortly thereafter, on March 7, 2025, U.S. President Donald Trump issued an executive order exempting any CUSMA-compliant good from the U.S tariffs. This resulted in more than 85% of Canadian goods entering the U.S. tariff-free. While Canada did not offer a similar exemption, it paused the enactment of Phase 2 retaliatory tariffs on a much longer list of goods (worth C$125-billion).

For a full history of the Canadian-US trade measures, see our U.S.–Canada Tariffs: Timeline of Key Dates and Documents.

The CUSMA Exemption 

Canada’s latest move aligns its retaliatory measures with the U.S. CUSMA exemption. Specifically, U.S. goods imported into Canada will be exempt from the 25% retaliatory tariffs if they qualify as “originating” goods under the product-specific rules of origin under CUSMA and are accompanied by a valid certificate of origin at entry.

Importers of U.S. goods must now ensure their shipments meet CUSMA qualification and certification requirements, while also complying with the record-keeping and documentation rules enforced by the Canada Border Services Agency.

Canadian Tariffs on U.S. Steel, Aluminum and Autos Remain in Force

Since March 2025, the U.S. has imposed tariffs on Canadian steel, aluminum and automobiles, with no exceptions for goods certified as CUSMA-compliant.

As a result, the 25% Canadian retaliatory tariffs on U.S. auto imports, aluminum and steel products will remain in force.

Looking Ahead

The reciprocal adoption of the CUSMA exemption signals an effort to stabilize bilateral trade relations between Canada and the U.S. as they prepare for the upcoming CUSMA review negotiations scheduled for 2026. At this time, businesses on both sides of the border should:

• conduct a CUSMA origin review of goods to be imported into Canada
• implement or update CUSMA certification procedures
• monitor ongoing trade developments in the steel, aluminum and auto sectors

For more information, please contact the authors or any other member of our International Trade group.