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Country Tariff Guide · May 2026

Canada Tariffs 2026

USMCA-qualifying Canadian goods enter the US at 0% duty. Non-qualifying goods pay the flat 10% Section 122 surcharge. Section 232 adds 25% on steel and 10% on aluminum — with no USMCA exemption. Softwood lumber carries additional ADD/CVD charges of 8–14%.

USMCA rate

0%

origin-compliant goods

Section 122 (non-USMCA)

10%

was 25% IEEPA — struck down

§232 Steel

25%

all Canadian steel

Softwood ADD/CVD

~11%

avg combined rate

USMCA: Canada's Zero-Tariff Framework

The United States-Mexico-Canada Agreement (USMCA) has governed North American trade since July 2020. It eliminates most tariffs between the three countries for goods that meet rules of origin. The agreement is subject to a mandatory review in 2026 — until it's renegotiated or terminated, its duty-free rates remain in effect.

Regional Value Content (RVC)

Most goods: 60% RVC minimum. Automotive: 75% RVC. Calculated by net-cost or transaction-value method.

Tariff Classification Change

Finished goods must shift HS code from their inputs at the chapter, heading, or subheading level as specified per product.

Labor Value Content (Autos)

Automotive must have 40–45% of content produced by workers earning ≥ $16/hr — a new rule unique to USMCA vs NAFTA.

Yarn-Forward (Apparel)

Yarn and fabric must originate in a USMCA country. Third-country fabric triggers Section 122 or MFN rates.

10% Section 122 Surcharge — non-USMCA goods

Executive Order 14197 (February 1, 2025) imposed 25% tariffs on non-USMCA Canadian goods, citing fentanyl and immigration concerns at the northern border. Energy products (crude oil, LNG, electricity) were charged at 10%. USMCA-compliant goods are fully exempt. Subsequent proclamations have adjusted timelines — always verify current CBP guidance for the latest status.

Canada Tariff Rates by Product (2026)

ProductHSMFNUSMCASection 122
Passenger vehicles (cars)87032.5%0%*25%†
Steel (flat-rolled)7208–72120–6.5%0%*25%†
Aluminum (unwrought)76010–6.5%0%*10%†
Crude oil & energy27095.5¢/bbl0%10%†
Lumber / softwood44070–4%0%varies
Pharmaceuticals30040%0%0%
Electronics / computers8471–84730%0%0%
Dairy products0401–04060–20%TRQ*25%†
Grain / wheat10010–0.65¢/kg0%0%
Auto parts87082.5–4%0%*25%†

* USMCA rate requires valid Certificate of Origin and rules-of-origin compliance.

† The 25% IEEPA border tariff (EO 14197) was struck down Feb 2026; non-USMCA goods now pay the flat 10% Section 122 surcharge.

Canada vs Mexico — What's Different?

Factor🇨🇦 Canada🇲🇽 Mexico
USMCA zero-tariff✓ 0% on qualifying goods✓ 0% on qualifying goods
Section 122 surcharge10% non-USMCA10% non-USMCA
§232 Steel25% (no USMCA exemption)25% (no USMCA exemption)
§232 Aluminum10%10%
Softwood lumber ADD/CVD~8–14% active ordersNot applicable
Energy (oil/gas)10% Section 122 rateStandard rates
Apparel (yarn-forward)USMCA yarn-forward ruleUSMCA yarn-forward rule
Section 301Not applicableNot applicable

Canada Tariffs — Frequently Asked Questions

Related Tariff Guides

Tariff data based on HTSUS 2026, Executive Orders through May 2026, and CBP AD/CVD orders. Rates can change — verify with a licensed customs broker before filing entries. This is informational only and not legal or customs advice.

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Key Facts — Canada 2026

  • USMCA: 0% on qualifying goods
  • Section 122: 10% (non-USMCA goods)
  • Section 122 energy: 10% (oil, gas, LNG)
  • §232 Steel: 25% (no USMCA waiver)
  • §232 Aluminum: 10%
  • Softwood lumber ADD/CVD: ~8–14%
  • MPF: 0.3464% (min $32.71, max $634.62)
  • No Section 301 (China-only)
  • USMCA review: 2026
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