April 9, 2025. We would like to inform you about a significant update from the Canada Border Services Agency (CBSA) regarding the United States Surtax Order (Motor Vehicles 2025). Effective April 9, 2025, motor vehicles originating in the United States and imported into Canada will be subject to a surtax of 25% of the value for duty.
Key Points:
- Surtax Details: The surtax applies to both new and used motor vehicles, including those with electric motors and internal combustion piston engines .Application is based on HS Classification detail of which can be found here: Orders In Council – Search
- Affected Vehicles: Examples include passenger cars, sport utility vehicles, motorhomes, ambulances, hearses, and prison vans.
- Exemptions: Vehicles specifically designed for traveling on snow, golf cars, and similar vehicles based on HS Classification. As well as imports that can be classified under certain sections of chapter 98 or have certain tariff codes from chapter 99 apply.
- CUSMA Impact: The surtax applies even if the vehicle qualifies for preferential tariff treatment under the Canada–United States–Mexico Agreement (CUSMA). However, the value for duty that surtax is applied on will be calculated based on US content. This will be considered 85% US content unless the Canadian Importer can prove a lower amount.
For a complete list of goods subject to the surtax and further details, please refer to the official CBSA notice here.
We encourage you to review this information carefully and consider its implications for your business.