The China Surtax Remission Order (2024), registered as SOR/2025-12, was enacted by the Government of Canada under section 115 of the Customs Tariff on January 31, 2025. This order provides relief from recently imposed surtaxes on Chinese-made electric vehicles and steel and aluminum products.

The surtaxes, introduced through the China Surtax Order (2024), include a 100% surtax on Chinese-made electric vehicles implemented on October 1, 2024, and a 25% surtax on Chinese-made steel and aluminum products introduced on October 22, 2024. The decision to impose these measures followed public consultations where Canadian stakeholders highlighted the need to address the economic threat posed by Chinese producers. While there was broad support for the surtaxes, concerns were raised about the ability of businesses to adjust supply chains in time, particularly due to factors such as limited alternative suppliers, certification requirements, or pre-existing contractual obligations mandating the use of Chinese inputs.

The Remission Order establishes clear criteria for granting relief from surtaxes. It applies in cases where alternative sources for certain goods are not available domestically or from non-Chinese sources, where businesses are bound by pre-existing contracts requiring them to purchase Chinese inputs, or in other exceptional circumstances that could significantly impact the Canadian economy. However, remission is strictly limited to certain conditions and will not be granted for goods imported solely for resale to the United States in the same condition. The authority to remit surtaxes under this order is granted to the Governor in Council based on recommendations from the Minister of Finance. The overarching objective of the order is to provide a transition period for Canadian businesses adjusting to the new trade measures while ensuring they remain competitive. To implement this, remission applications received before November 8, 2024, were prioritized for review, and the Government continues to assess subsequent applications.

The scope of the China Surtax Remission Order (2024) extends to specific goods under schedules 1 and 2 of the order. Schedule 1 covers goods experiencing short supply, where alternative sourcing is currently unfeasible. These goods include a range of steel and aluminum products such as certain plates, hot-rolled and cold-rolled sheets, bars, rods, pipes, tubes, wire, and stainless-steel items. Aluminum items under this schedule include plates, sheets, strips, coils, foil, rolls, tubes, bars, rods, and pipes. The remission period for these goods began on October 22, 2024, and extends until December 31, 2025, with possible extensions if supply shortages persist. Schedule 2 applies to situations involving pre-existing contractual obligations established before August 26, 2024, which require Canadian businesses to use Chinese inputs for a defined period. This schedule also covers additional exceptional circumstances that limit resourcing alternatives. Companies eligible under Schedule 2 are specifically identified by their business numbers, and remission applies only to the designated products and timeframes outlined in the schedule.

Canada (SOR/2025-12) February 12, 2025