TARIFF TRACKER
Canada imposes 25% surtax on US-origin motor vehicles
Canada applies a 25% surtax to covered motor vehicles originating in the United States and imported into Canada. CUSMA-qualifying vehicles are still subject to the surtax, but Canadian and Mexican originating content can reduce the value used to calculate it.
Updated October 12, 2026
STATUS
In effect
·
EFFECTIVE
·
Canada
RATE
25%
25% of the value for duty
COUNTRIES
United States
PRODUCT FAMILIES
Autos/parts
HTS CHAPTERS
87, 98
COVERED GOODS
Covered goods are motor vehicles listed in Schedules 1 and 2 to the United States Surtax Order, including new and used motor vehicles, passenger vehicles, certain goods vehicles not exceeding 5 tonnes, electric vehicles and internal combustion vehicles. The notice names tariff items in chapters 87, 98 and 99, with certain chapter 98 and 99 goods excluded unless listed in Schedule 2.
EXCLUSIONS
The surtax does not apply to US goods in transit to Canada when the surtax came into force, goods eligible to be marked as originating from Puerto Rico, Guam, the Northern Mariana Islands, American Samoa or the US Virgin Islands, most Chapter 98 and Chapter 99 goods unless listed in Schedule 2, Akwesasne Residents Remission Order goods, temporary importation of foreign motor vehicles, returning Canadian-registered duty-paid US-made vehicles, repaired or altered vehicles described in the notice, and tariff item 8704.60.00 vehicles with gross vehicle weight exceeding five tonnes.
USMCA
The surtax applies even if the vehicle qualifies for CUSMA preferential treatment. If the vehicle is entitled to the United States Tariff, Canadian and Mexican originating content is excluded from the value for duty for surtax purposes, with a 15% assumed exclusion unless the importer supports a higher amount.
WHAT TO DO (OUR GUIDANCE, NOT LEGAL ADVICE)
Identify imported US-origin vehicle SKUs covered by the schedules and declare the correct surtax code in CARM. For CUSMA vehicles, retain origin and content records if claiming the 15% exclusion or a higher Canadian and Mexican content exclusion.
SOURCES
QUOTES FROM THE SOURCE
Signed: "Ottawa, April 8, 2025" (source)
Effective date: "surtax provisions effective April 9, 2025 , on motor vehicles that originate in the United States (U.S.)." (source)
Rate: "motor vehicles originating in the U.S. and imported into Canada are subject to a surtax in the amount of 25% of the value for duty" (source)
Covered goods: "Both new and used motor vehicles are subject to the surtax, including motor vehicles with electric motors and motor vehicles with internal combustion piston engines." (source)
Countries: "The surtax only applies to motor vehicles that originate in the U.S." (source)
Exclusions: "The surtax will not apply to U.S. goods that are in transit to Canada on the day on which the surtax comes into force." (source)
USMCA: "The surtax applies even if the motor vehicle qualifies for preferential tariff treatment under the Canada - United States - Mexico Agreement (CUSMA)." (source)
Checked against source
on
CBSA notice (last updated Sep 1, 2025): 25% surtax on U.S.-origin motor vehicles from April 9, 2025, applies even to CUSMA vehicles with a 15% content deduction; Canada Finance page (list as of Aug 26, 2026) says counter-tariffs on U.S. autos continue to apply.
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