The Order Amending the United States Surtax Order (2025-1) and the United States Surtax Order (Steel and Aluminum 2025) under the Customs Tariff, reflects Canada’s response to recent U.S. tariffs. This Order is a regulatory action taken in reaction to the imposition of U.S. tariffs on Canadian goods, aiming to mirror U.S. actions while attempting to provide certain exemptions to safeguard Canadian industries and to avoid negative impacts on specific communities, such as those residing on Campobello Island, New Brunswick.

The United States Surtax Order (2025-1) was initially imposed in response to U.S. tariff measures on Canadian imports, including consumer and household goods, as part of broader trade disputes. The Order targets $30 billion in annual imports and was amended to include specific exemptions. Notably, poultry and egg products are exempt from these tariffs, provided they qualify for the Import for Re-export Program (IREP), a provision that allows Canadian processors to import goods duty-free if they are used as inputs for further processing and re-exportation. Another significant amendment allows personal or household goods imported by residents of Campobello Island, New Brunswick, to be exempted from these tariffs. This exemption is vital for the island’s residents, who, due to limited access to Canadian stores and reliance on U.S. imports, would face undue hardship if these goods were subject to tariffs.

Similarly, the United States Surtax Order (Steel and Aluminum 2025) also underwent amendments. The revisions to this order extend the exemption for personal goods imported from the U.S. by Campobello Island residents.

The background to these amendments lies in the broader context of the trade relationship between Canada and the United States. The two nations have one of the most economically integrated regions in the world, with over $1 trillion in goods and services crossing their shared border annually. These trade ties have contributed significantly to the U.S. economy, including supporting nearly 8 million American jobs.

The specific tariffs targeted by the Orders—imposed in early 2025 by the Trump administration—include 25% tariffs on Canadian goods and 10% tariffs on imported energy products. These tariffs were deemed a violation of the Canada-United States-Mexico Agreement (CUSMA) and the U.S.’s World Trade Organization obligations. In retaliation, Canada imposed its own tariffs, starting with the U.S. Surtax Order (2025-1), affecting $30 billion of imports. This was followed by the imposition of reciprocal tariffs on steel, aluminum, and other goods from the U.S. under the United States Surtax Order (Steel and Aluminum 2025). Canada’s response aligns with its rights under Section 53 of the Customs Tariff, which allows the country to apply trade measures in retaliation to actions that harm its trade interests.

By offering exemptions for goods used in manufacturing and for personal household items brought in by residents of isolated communities like Campobello Island, the Canadian government aims to minimize the economic disruptions caused by the ongoing trade tensions.

Canada (119-2025) April 23, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.