In a Customs Notice published on April 8, 2025, the Canadian government announced a 25% tariff on U.S.-made vehicles that do not comply with the Canada–United States–Mexico Agreement (CUSMA), as well as on any non-Canadian and non-Mexican content within CUSMA-compliant U.S.-made vehicles.
These tariffs only apply to goods originating from the U.S.. Such goods are defined as those eligible to be marked as products of the U.S. according to the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.
The surtax applies even if the motor vehicle qualifies for preferential tariff treatment under CUSMA:
- If a motor vehicle is entitled to the United States Tariff (the CUSMA preferential tariff treatment duty rate), the value of all goods that originate in Canada or Mexico that are used in the production of the motor vehicle are excluded from the value for duty of the motor vehicle to calculate the surtax.
- As a means to account for the assumed value of all goods that originate in Canada or Mexico that are used in the production of the motor vehicle, 15% of the value for duty of the motor vehicle will be excluded from the value for duty to calculate the surtax (i.e., the value for duty for the surtax is calculated at 85% of the total value for duty of the goods).
- To claim a higher exclusion amount, the importer should obtain evidence of the value of goods that originate in Canada or Mexico and are used in the motor vehicle production and provide it to a CBSA official upon request. In such cases, importers are expected to obtain sufficient supporting information (e.g. a valid CUSMA certification of origin, records substantiating compliance with Regional Value Content (RVC), core parts, steel/aluminum and Labour Value Content (LVC), value for duty documentation, and documentation of Canadian/Mexican parts used).
More information on this intent and the complete list of goods can be found here:
List of vehicle products from the United States subject to 25 per cent tariffs effective April 9, 2025 - Canada.ca
Customs Notice 25-15: United States Surtax Order (Motor Vehicles 2025)
