Do Canadians Pay a 25% Surtax on U.S. Goods When Returning from Shopping?

(CANADA) — Canada now limits the broad 25% surtax that once hit many U.S. purchases by cross-border shoppers, but Canadians returning with some goods from the United States still face steep border charges in April 2026, especially on steel, aluminum and certain motor vehicle products.

That marks a sharp shift from the early phase of the trade dispute, when the surcharge applied more widely. Since September 1, 2025, Canada has removed most of its 25% retaliatory tariffs on CUSMA-compliant U.S. goods, while keeping counter-tariffs on three sectors where the United States has not provided CUSMA exemptions: steel, aluminum, and motor vehicles.

For many Canadians weighing whether cross-border shopping still saves money, the answer now depends less on the trip itself than on what they buy, whether it complies with CUSMA rules of origin, and how the Canada Border Services Agency classifies the goods at the border.

A major turning point came on February 20, 2026, when the U.S. Supreme Court struck down several of President Trump’s emergency tariffs imposed under the International Emergency Economic Powers Act in Learning Resources, Inc. v. Trump. That ruling invalidated the IEEPA-based tariffs, including those on fentanyl precursors and other goods, and prompted the United States to replace them with a new tariff structure.

Days later, the United States imposed a temporary 10% global tariff effective February 24, 2026, under Section 122 of the Trade Act of 1974. That tariff largely exempts Canada-United States-Mexico Agreement compliant goods, but sector-specific tariffs remain in place. The 10% tariff is authorized for a maximum of 150 days unless Congress extends it.

Canada adjusted its response as the U.S. approach changed. By lifting most retaliatory tariffs on CUSMA-compliant goods, Ottawa eased costs on a wide range of consumer products that had become more expensive during the dispute’s broadest phase.

That means most CUSMA-compliant consumer goods, including beverages, cosmetics, paper products, and general merchandise, no longer face the 25% surtax. Those goods now receive either standard most-favored-nation treatment or preferred rates if they comply with CUSMA rules of origin.

The relief does not extend to every category. Goods that remain exposed to surtaxes or tariffs include steel products, aluminum and aluminum derivatives, non-CUSMA-compliant motor vehicles and parts, softwood timber and lumber, certain upholstered furniture and kitchen cabinets and vanities, and certain semiconductors and derivative products.

For steel products, the surcharge runs from 25%–50%, including raw and semi-finished steel. Aluminum and aluminum derivatives also face 25%–50% surtax.

Non-CUSMA-compliant motor vehicles and parts face a 25% surtax. Softwood timber and lumber face a 10% tariff with no CUSMA exemption.

Certain upholstered furniture and kitchen cabinets and vanities face a 25% tariff, scheduled to increase to 30% and 50% respectively on January 1, 2027. Certain semiconductors and derivative products face a 25% tariff, though exemptions apply for goods used in U.S. data centers, research and development, and certain consumer applications.

Personal exemption rules at the border have not changed. Canadians still receive a $200 CAD personal exemption after a 24-hour trip to the United States and 800 CAD after a 48-hour stay.

Day-trippers get no such break. There is no exemption for trips of less than 24 hours, so any goods brought back must be declared and remain subject to applicable duties and surtaxes.

That matters because even when the broad 25% surtax no longer applies, ordinary duties and sales taxes can still erase much of the price advantage that once drove frequent cross-border shopping in border communities. If the goods do not meet CUSMA requirements, Canada still applies its trade barriers.

Steel has become one of the most complicated categories. On June 27, 2025, Canada imposed import quotas on steel mill products from non-free trade agreement partners, with a 50% surtax applying to imports above the quota.

Ottawa tightened those limits again on July 16, 2025, reducing tariff rate quota levels for specified steel products from 100% to 50% of 2024 volumes. Then, on December 26, 2025, Canada added a 25% surtax on steel derivative goods imported from all countries.

That steel derivative surtax applies on top of other duties, anti-dumping duties, countervailing duties, and taxes such as GST/HST. For personal shoppers, that can affect products such as steel tools, automotive parts, appliances, and other steel-containing goods bought in the United States and brought back into Canada.

The government has also created remission programs, but they offer little direct help to most individuals returning from shopping trips. Amendments to the United States Surtax Remission Order entered into force on February 5, 2026.

The remission categories cover goods used in public health, health care, public safety, and national security, as well as goods used in Canadian manufacturing, processing, and food and beverage packaging. They also cover goods imported for the manufacture of motor vehicles, vehicle parts, aircraft, ground flying trainers, or spacecraft, provided they enter Canada between February 1, 2026, and July 1, 2026.

Other qualifying categories include goods listed under specific tariff classifications in the order’s schedules, utility wind towers for eligible projects west of the Ontario–Manitoba border, and goods already in transit to Canada when the order took effect. Claims must be filed within two years of importation and supported by documentation.

Some relief is time-limited. Certain steel, aluminum, aerospace, and motor vehicle-related goods qualify for surtax relief only until June 30, 2026.

At the border, the Canada Border Services Agency collects the surtax at land crossings, mail facilities, and courier centers. The rules apply not just to goods carried home in person, but also to goods purchased online, shipped by mail or courier, and commercial shipments.

Origin matters. Goods marked “Made in the USA” or with unclear origin are presumed to be American-made and subject to surtaxes.

That can turn a seemingly modest purchase into a more expensive one. A CUSMA-compliant pair of sneakers bought from a U.S. retailer for $100 now faces no surtax, though the shopper still pays standard duties and HST/GST.

A U.S.-made power drill priced at $150 presents a different picture. Because steel derivative goods face the 25% surtax as of December 26, 2025, the surcharge adds $37.50, plus standard duties and 13% HST in most provinces, for a total cost of about $210.

A $500 replacement engine component from a U.S. supplier that does not meet CUSMA requirements also draws the 25% motor vehicle tariff. That adds $125, plus duties and taxes, pushing the total above $650.

Those costs have broader effects beyond occasional shoppers. About 75% of Canadians live within 100 miles of the U.S. border, leaving many households in places such as Windsor, Ontario, and other border communities more exposed to abrupt changes in the math of routine shopping trips.

Lower-income shoppers have felt those changes more acutely because cross-border trips have long offered a way to cut costs on necessities. Small businesses that depend on American goods have also had to rethink prices, suppliers, and product lines as tariffs stayed in place in selected sectors.

Akwesasne residents remain an exception in one area. Goods covered by the Akwesasne Residents Remission Order remain excluded from surtaxes.

Certain imports under Chapters 98 and 99 of the Customs Tariff also remain exempt. Those include goods already in transit when the order took effect, casual goods under Canadian regulations, and items under Chapter 98 of the Customs Tariff.

Still, those exemptions do not spare personal items that exceed existing duty-free limits unless the goods fall within one of those categories. For many travelers, that leaves the personal exemption rules and CUSMA compliance as the main dividing line between a manageable tax bill and a much higher one.

More changes may lie ahead. CUSMA is scheduled for renegotiation in July 2026, a development that could reshape tariff treatment again for both consumers and businesses.

The temporary U.S. 10% global tariff also carries its own deadline because Section 122 authorizes it for no more than 150 days unless Congress acts. At the same time, scheduled increases on furniture and kitchen cabinets set for January 1, 2027 remain on the books.

For now, the headline for Canadians is narrower than it was a year ago. They do not automatically pay a blanket 25% surtax on all U.S. goods when returning from cross-border shopping, but many still face that levy on targeted products, and some goods carry even higher trade penalties.

The result is a patchwork system shaped by court rulings, tariff revisions, remission orders and sector-by-sector exemptions. Until the wider dispute eases, Canadians crossing back from the United States face a simple calculation with an increasingly complicated answer: the savings depend on what is in the trunk.