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Tariff alert: Canada lifts retaliatory tariffs on CUSMA-qualifying goods

Updated: August 26, 2025

On Aug. 22, 2025, Prime Minister Carney announced that Canada will withdraw retaliatory tariffs on goods from the U.S. that qualify under the Canada-U.S.-Mexico Agreement (CUSMA) effective Sept. 1, 2025. This adjustment affects a wide range of consumer and industrial imports that had been subject to 25% tariffs since March.

What is changing

Tariffs removed

The 25% tariffs on goods imported into Canada from the U.S. are eliminated on CUSMA-qualifying goods.

Tariffs retained

Tariffs of 25% will remain in place for autos, steel, and aluminum from the U.S. where trade sensitivities continue. Currently, there is no plan to increase the tariff rates of steel and aluminum to match those of the U.S.

Policy alignment

Canada is bringing its tariff response in line with U.S. relief, emphasizing Canada’s willingness to honour the terms of CUSMA.

Why it matters

Canadian importers

Immediate cost reductions apply to CUSMA-eligible goods. Companies should update landed cost models and evaluate pricing.

Canadian exporters

Canadian manufacturers dependent on U.S. inputs will see reduced costs and improved supply stability.

Policy context

This step signals Canada’s intent to align with U.S. tariffs ahead of the 2026 CUSMA review.

Compliance and tariff mitigation

Proof of origin: Importers must maintain all required CUSMA documentation. Canada Border Services Agency (CBSA) and the U.S. Customs Border Protection (CBP) are expected to review claims closely to confirm eligibility for Canadian imports and U.S. imports, respectively.

Non-CUSMA goods: Where goods do not qualify for CUSMA, tariffs remain in force. Companies may continue to pursue Canadian tariff relief under the existing remission process, provided eligibility requirements are met.

Ongoing exposure: Tariffs remain on steel, aluminum, and autos. These sectors should continue to plan around elevated tariff costs.

Two business professionals shaking hands in a workshop. Stacks of wooden boards and industrial equipment are visible in the background.

Next steps for businesses

Update landed cost calculations to capture tariff relief on CUSMA-qualifying goods.

Confirm supplier certifications and maintain origin documentation to withstand compliance checks by the CBSA.

Review remission opportunities for non-CUSMA goods still subject to punitive tariffs.

Reassess sourcing strategies to increase use of CUSMA-qualifying inputs where practical.

Monitor retained sectors for potential future policy adjustments.

How BDO can help

Our Customs & International Trade team can assist with CUSMA origin reviews, remission order claims, landed cost modeling, and compliance documentation. We also support tariff mitigation strategies and scenario planning as businesses prepare for any potential CUSMA reviews by the CBSA.

For more resources on how your business can navigate the changing tariff and trade environment, visit our tariff readiness hub.

Charmaine Goddeeris

Director, Indirect Tax

Contact View bio

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