Importing from Canada: USMCA, Duty Rates, and Customs Costs for U.S. Importers

What Are the Current U.S. Tariff Rates on Imports from Canada?

Most Canadian goods enter the U.S. duty-free under USMCA. As of January 2026, nearly 85% of imports from Canada claimed USMCA preferential treatment, producing effective tariff rates below 5% according to Penn Wharton Budget Model data. Non-USMCA goods face the 10% Section 301 forced-labor duty in force since July 24, 2026; goods entered free under USMCA are exempt from it. Products covered by Section 232 (steel, aluminum, autos, lumber, copper, semiconductors, pharmaceuticals, drones) face sector-specific tariffs of 25% to 100% regardless of USMCA status. Since August 22, 2026, listed Canadian dairy, alcoholic beverage and motor vehicle products carry an additional 50% duty under Section 338 of the Tariff Act of 1930, and from September 29, 2026 certain of those products are excluded from importation altogether.

Primary sources: the USTR notice of action at 91 FR 47318 for the July 24, 2026 Section 301 duties, and Proclamation 11047 at 91 FR 46653 for the Section 338 dairy duties. The Section 122 surcharge that the Section 301 layer replaced expired on July 24, 2026.

Does USMCA Eliminate All Tariffs on Canadian Goods?

No. USMCA eliminates tariffs only on goods that meet the agreement's rules of origin. Products that do not qualify under USMCA (because they contain too much non-North American content or fail to meet product-specific rules) are treated as standard MFN imports and face the 10% Section 301 forced-labor duty. Section 232 tariffs on steel, aluminum, autos, lumber, copper, semiconductors, pharmaceuticals and drones apply even to USMCA-qualifying goods, with limited exceptions for certain auto parts. And the Section 338 duties and import bans on listed dairy, alcoholic beverage and motor vehicle products carry no USMCA exemption at all; see the Section 338 section below.

Canada was the third-largest source of U.S. goods imports in 2024 at $412 billion, and the top destination for U.S. goods exports at $350 billion. The U.S. goods trade deficit with Canada was $46.4 billion in 2025. For importers sourcing energy, metals, lumber, autos, or agricultural products from Canada, the difference between USMCA-qualifying and non-qualifying treatment can be tens of thousands of dollars per shipment.

Last updated: September 18, 2026

How USMCA Qualification Works

USMCA is the single most important factor in determining what you pay on Canadian imports. A product qualifies for USMCA preferential (typically duty-free) treatment if it meets one of three criteria:

Wholly obtained or produced in the USMCA territory (U.S., Canada, or Mexico)
Produced entirely from originating materials in one or more USMCA countries
Produced using non-originating materials that satisfy the product-specific rules of origin (tariff shift, regional value content, or both)

Regional Value Content (RVC) thresholds vary by product. The two calculation methods are:

Method	Typical RVC Threshold	Formula
Transaction Value Method	75%	(Transaction Value - Non-Originating Materials) / Transaction Value
Net Cost Method	65%	(Net Cost - Non-Originating Materials) / Net Cost

Automotive rules are the strictest. Passenger vehicles must contain at least 75% North American content (up from 62.5% under NAFTA), with additional requirements for core parts, principal parts, complementary parts, and a labor value content threshold.

The certification process is flexible: USMCA does not require a specific certificate of origin form. Certification can be made on an invoice or other commercial document, as long as it includes the nine required data elements from USMCA Annex 5-A. However, importers must maintain supporting documentation for five years and be prepared for CBP verification audits.

GingerControl is a trade compliance AI platform that helps importers, exporters, and customs brokers classify products, simulate tariff costs, and track policy changes. The Tariff Calculator models the difference between USMCA-qualifying and non-qualifying entries, so importers can quantify exactly how much they save with preference claims. GingerControl identifies and documents the opportunity; your licensed broker or counsel files.

What Tariffs Apply to Non-USMCA Canadian Goods?

Canadian goods that do not meet USMCA rules of origin face the same tariff treatment as imports from any other MFN country:

Tariff Layer	Rate	Notes
MFN base duty	Varies by HTS code (0% to 30%+)	Standard duty rate
Section 122 surcharge	Expired 24 Jul 2026	Applied to non-USMCA goods not covered by Section 232 while in force
Section 301 (forced labor)	10%	Applies to Canadian goods from 24 Jul 2026 under heading 9903.05.29; goods entered free of duty under USMCA are exempt (heading 9903.05.93)
Section 338 (listed dairy, alcoholic beverages, motor vehicle products)	50%	In force since 22 Aug 2026 on the products in the proclamation annexes (headings 9903.03.12 to 9903.03.14); no USMCA exemption; listed products excluded from importation from 29 Sep 2026
Section 232 (steel/aluminum)	50%	Applies regardless of USMCA status
Section 232 (autos/parts)	25%	USMCA carve-out for qualifying passenger vehicle parts
Section 232 (lumber/timber)	10% to 25%	Applies regardless of USMCA status
Section 232 (copper)	50%	Applies regardless of USMCA status
Section 232 (semiconductors)	25%	Applies regardless of USMCA status
Section 232 (pharmaceuticals, drones)	Up to 100%	Applies regardless of USMCA status; see the Section 232 rate table
AD/CVD duties	Varies	Softwood lumber, other specific products

The critical distinction: USMCA exempts qualifying goods entered free of duty from the Section 301 forced-labor layer (heading 9903.05.93). It does not exempt goods from Section 232 tariffs (with limited exceptions for certain auto parts) or from Section 338 duties.

How Do Section 232 Tariffs Affect Canadian Imports?

Section 232 tariffs are the biggest cost driver for Canadian industrial imports. All country exemptions for Canada were eliminated in March 2025, and rates were increased to 50% on steel and aluminum in June 2025.

Steel and Aluminum (50%)

Canada was historically the largest foreign supplier of steel and aluminum to the U.S. The 50% Section 232 tariff applies to all steel and aluminum products and their derivatives, regardless of USMCA status. Canada has imposed retaliatory tariffs on C$15.6 billion ($11 billion) worth of U.S. steel and aluminum in response.

For derivative products (finished goods containing steel or aluminum), the Section 232 duty has applied to the full customs value of the product since April 6, 2026, regardless of metal content (Proclamation 11021). The earlier content-only method, with the Section 122 surcharge on the remainder, no longer applies.

Autos and Auto Parts (25%)

A 25% Section 232 tariff on passenger vehicles and certain auto parts took effect in 2025. USMCA-qualifying auto parts for passenger vehicles and light trucks may be eligible for relief from the Section 232 tariff. However, qualification requires meeting both USMCA rules of origin and specific Section 232 exemption criteria. Parts for medium and heavy-duty vehicles have separate rules.

Negotiated rates for certain trading partners set the auto/parts tariff at 15% for Japan, South Korea, and the EU. Canada and Mexico face the standard 25% on non-USMCA-qualifying vehicles and parts. Separately, the Canadian motor vehicle products listed under heading 9903.03.14 carry the 50% Section 338 duty, which since September 15, 2026 applies in addition to any Section 232 duty on the same article (Proclamation 11065).

Softwood Lumber (10% to 25%)

Canadian softwood lumber faces a dual tariff burden: Section 232 tariffs of 10% to 25% (depending on product classification and origin), plus longstanding antidumping and countervailing duty orders. The combined rate can exceed 30% on certain lumber products. USMCA does not exempt lumber from Section 232 tariffs.

What Are the Section 338 Duties and Import Bans on Canadian Goods?

Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338) lets the President impose duties of up to 50% on, or exclude from importation, the products of a country found to discriminate against U.S. commerce. The status as of September 18, 2026:

Duties in force. Three proclamations of July 20, 2026 imposed an additional 50% ad valorem duty on listed products of Canada: Proclamation 11046 for alcoholic beverages (91 FR 46639), Proclamation 11047 for dairy (91 FR 46653) and Proclamation 11048 for motor vehicles (91 FR 46663). Proclamation 11056 of August 18 suspended them for three days, so they took effect for goods entered for consumption on or after 12:01 a.m. ET on August 22, 2026. CBP files them under headings 9903.03.12 (alcoholic beverages), 9903.03.13 (dairy) and 9903.03.14 (motor vehicles) per CSMS #69606660.
The scope is wider than the three labels. Each proclamation's Annex II lists specific HTS lines, and CBP's six-page list runs well beyond beer, cheese and cars: the motor vehicle heading alone reaches lines in Chapters 44, 48, 84, 85, 90 and 94. Check your own lines against the current annexes rather than the category name.
Two carve-outs, and no USMCA exemption. As issued, the duties did not apply to articles already subject to Section 232 duties, or to civil aircraft agreement articles other than unmanned aircraft (headings 9903.03.15 and 9903.03.16 at 0%). The September 15 modifications below changed the first carve-out for alcoholic beverages and motor vehicles. The proclamations make the duty additional to every other duty and name no USMCA relief; CBP's guidance likewise provides none. That is the opposite of the Section 301 forced-labor layer, which does exempt USMCA-free Canadian goods.
Scope modified September 15, 2026. Proclamation 11064 (alcoholic beverages) and Proclamation 11065 (motor vehicles) added the products in their Annex I Part A, removed those in Part B, and provided that the Section 338 duty on the products they cover now applies in addition to any Section 232 duty, effective for entries on or after September 15, 2026. Proclamation 11062 refers to a September 8 proclamation modifying the dairy scope; it had not been published in the Federal Register as of September 18, 2026, so the dairy carve-out cannot be confirmed either way.
Import bans from September 29, 2026. Proclamation 11061 (alcoholic beverages), Proclamation 11062 (dairy) and Proclamation 11063 (motor vehicles), all of September 8, 2026 and published September 14, exclude the products in their annexes from importation into the United States, effective for goods imported on or after 12:01 a.m. ET on September 29, 2026. Products imported but not yet entered for consumption, or withdrawn from warehouse for consumption, before that date remain subject to the 50% duty rather than the ban. If a ban is invalidated, the 50% duty applies in its place.
Mechanics. CBP states the duty is subject to drawback, goods admitted to an FTZ must take privileged foreign status, and CBP's reporting order places the Chapter 99 additional-duty lines before the trade remedy lines (Section 301, then Section 232, then Section 201) and ahead of the Chapter 1 to 97 classification.

An exclusion from importation is not a rate, so no bond, FTZ or preference claim cures it. Scope your Canadian purchase orders against the annex lines before the date, and confirm entry timing with your broker. GingerControl identifies and documents the opportunity; your licensed broker or counsel files.

What About Dairy and Agricultural Tariff Rate Quotas?

Canada's dairy sector operates under a supply management system that limits production, sets prices, and restricts imports. Under USMCA, Canada committed to providing greater access for U.S. dairy exports through 14 U.S.-specific tariff-rate quotas (TRQs).

For U.S. importers bringing Canadian dairy products into the U.S., MFN rates apply first, and dairy products not covered by preferential quotas can face MFN tariffs exceeding 20%. Since August 22, 2026 the dairy-related products listed under heading 9903.03.13, which on CBP's list include lines in headings 0402, 0404, 1702, 1703, 2202 and 3501, carry an additional 50% Section 338 duty. From September 29, 2026 the products in the Annex to Proclamation 11062 are excluded from importation; dairy imported but not entered before that date stays at the 50% duty. The quota mechanics below still govern lines outside those annexes.

Agricultural products that qualify under USMCA generally enter duty-free of MFN, and goods entered free under USMCA are also exempt from the 10% forced-labor Section 301 duty under U.S. note 52(g). Non-qualifying agricultural goods face MFN rates plus that Section 301 layer; the 10% Section 122 surcharge they previously paid expired on July 24, 2026.

USTR has challenged Canada's dairy TRQ administration twice under USMCA dispute settlement, with mixed results. In June 2025, Canada enacted legislation preventing the government from increasing dairy TRQs or reducing over-quota tariffs in future negotiations.

How to Calculate Total Duty on a Canadian Import

Example: Non-USMCA steel pipe from Canada

Component	Rate	Amount (on $100,000 CIF)
MFN base duty (HTS 7306.30)	0%	$0
Section 232 (steel)	50%	$50,000
Section 301 (forced labor)	N/A (Section 232 articles excluded, Note 52(f))	$0
Section 338	N/A (steel pipe is not on the Section 338 lists)	$0
MPF	0.3464% (max $614.35)	$346.40
HMF	0.125%	$125
Total		$50,471.40
Effective rate		~50.5%

Example: USMCA-qualifying manufactured goods from Canada

Component	Rate	Amount (on $100,000 CIF)
MFN base duty	3.5%	$0 (USMCA preference: duty-free)
Section 301 (forced labor)	0% (USMCA-qualifying goods entered free are exempt, heading 9903.05.93)	$0
MPF	0.3464% (max $614.35)	$346.40
HMF	0.125%	$125
Total		$471.40
Effective rate		~0.5%

The difference between USMCA-qualifying and non-qualifying is dramatic. Use GingerControl's Tariff Calculator to model both scenarios for your specific HTS codes and see the exact cost difference.

FAQ

Do I need a certificate of origin for USMCA?

No formal certificate is required. USMCA allows certification on any commercial document (invoice, letter, etc.) as long as it contains the nine required data elements from Annex 5-A. The importer, exporter, or producer can make the certification. Records must be maintained for five years.

Are energy imports from Canada subject to tariffs?

Canadian energy products that qualify under USMCA enter duty-free and are exempt from the Section 301 forced-labor layer. Non-qualifying energy products face MFN rates plus the 10% Section 301 duty in force since July 24, 2026, unless the specific line sits in the Note 52(b) exemption list, which the notice sets out by HTS provision. The Section 122 surcharge expired July 24, 2026. Under the earlier IEEPA regime, non-USMCA Canadian energy faced a 10% tariff (compared to 35% on other non-USMCA goods), but those rates were invalidated when the Supreme Court struck down IEEPA tariffs.

Does USMCA protect Canadian steel and aluminum from Section 232?

No. Section 232 tariffs on steel (50%) and aluminum (50%) apply to Canadian products regardless of USMCA qualification. Canada is the largest foreign supplier of both metals to the U.S., and these tariffs have been a major point of contention in the bilateral relationship.

What happens to USMCA during the 2026 joint review?

The USMCA includes a mandatory joint review scheduled for July 2026. All three countries will assess the agreement's performance and decide whether to extend it. U.S. Commerce Secretary Howard Lutnick has indicated the administration intends to renegotiate USMCA. Changes could affect rules of origin, tariff preferences, and sector-specific provisions.

How much can I save by qualifying under USMCA?

The savings are substantial. Without USMCA, non-Section 232 Canadian goods face MFN duty plus the 10% Section 301 forced-labor duty. With USMCA, those same goods enter duty-free and escape the Section 301 layer. On a $500,000 shipment of manufactured goods with a 4% MFN rate, that is 14% against 0%, a difference of $70,000 in duties. Section 338 duties are the exception: a USMCA claim does not remove them. GingerControl identifies and documents the opportunity; your licensed broker or counsel files.

Do Section 338 duties apply to Canadian goods that qualify under USMCA?

Yes. Proclamations 11046, 11047 and 11048 impose the 50% duty in addition to any other duties and carve out only articles already subject to Section 232 duties and civil aircraft agreement articles, and since September 15, 2026 the alcoholic beverage and motor vehicle duties apply even on top of Section 232 duties. Neither the proclamations nor CBP's guidance in CSMS #69606660 provides a USMCA exemption, unlike the Section 301 forced-labor layer, which does. A listed dairy, alcoholic beverage or motor vehicle product from Canada pays the 50% whether or not it qualifies under USMCA.

Which Canadian goods are excluded from importation from September 29, 2026?

The products listed in the annexes to Proclamations 11061 (alcoholic beverages), 11062 (dairy) and 11063 (motor vehicles) of September 8, 2026 are excluded from importation for goods imported on or after 12:01 a.m. ET on September 29, 2026. The annexes are HTS-line specific, so check each line. Goods imported but not yet entered for consumption before that date remain subject to the 50% Section 338 duty rather than the ban, and if a ban is invalidated the 50% duty applies in its place.

Can GingerControl calculate USMCA vs. non-USMCA duty scenarios?

Yes. GingerControl's Tariff Calculator covers the full U.S. tariff stack for Canadian-origin goods, including the Section 232 layer. Enter your HTS code and select Canada as the origin to see each layer as a separate line item.

Calculate Your Canada Import Duties

The gap between USMCA-qualifying and non-qualifying Canadian imports has never been wider. With Section 232 tariffs at 50% on metals and 25% on autos, the 10% Section 301 forced-labor duty on non-USMCA goods, and 50% Section 338 duties on listed dairy, alcohol and motor vehicle products, getting your USMCA qualification right is worth real money. GingerControl's Tariff Calculator provides transparent, date-sensitive calculations across the full duty stack. Try it free →

GingerControl is not just a tool. We work with importers and trade compliance teams on process consulting, digital transformation strategy, and end-to-end custom system development. Talk to our team →

References

[REF 1] CRS, US-Canada Trade Relations Data cited: Canada as third-largest import source ($412B in 2024), top export destination ($350B), USMCA dairy TRQ disputes Source: CRS IF12595 Published: 2026

[REF 2] Penn Wharton Budget Model, Effective Tariff Rates Data cited: 85% USMCA claim rate, Canada/Mexico ETR below 5%, steel/aluminum ETR at 41.1% Source: Penn Wharton Published: March 16, 2026

[REF 3] CRS, Expanded Section 232 Tariffs on Steel and Aluminum Data cited: Canada retaliatory tariffs of C$15.6 billion, 50% steel/aluminum rate, derivative stacking Source: CRS IN12519 Published: 2025

[REF 4] BEA, U.S. International Trade in Goods and Services, Annual 2025 Data cited: U.S. goods trade deficit with Canada of $46.4 billion in 2025 Source: BEA Trade Release Published: February 2026

[REF 5] White House, Section 122 Fact Sheet (surcharge expired July 24, 2026) Data cited: 10% surcharge, USMCA exemption, Section 232 primacy, as they stood before expiry Source: White House Published: February 20, 2026

[REF 6] CRS, Presidential 2025 Tariff Actions Timeline Data cited: Section 232 rates, USMCA carve-outs for auto parts, negotiated rates by country Source: CRS R48549 Published: 2026

[REF 7] Global Trade Alert, US Tariff Stacking Explained Data cited: Steel/aluminum derivative stacking rules, timber tariff ranges, USMCA interaction Source: Global Trade Alert Published: 2025

[REF 8] Federal Register, Proclamations 11046, 11047 and 11048 of July 20, 2026, Section 338 duties on Canadian alcoholic beverages, dairy and motor vehicles Data cited: 50% additional duty, Section 232 and civil aircraft carve-outs, original August 19, 2026 effective date Source: 91 FR 46639, 91 FR 46653, 91 FR 46663 Published: July 23, 2026

[REF 9] Federal Register, Proclamation 11056 of August 18, 2026, Temporary Suspension Data cited: effective date moved to August 22, 2026 Source: 91 FR 54789 Published: August 24, 2026

[REF 10] Federal Register, Proclamations 11061, 11062, 11063, 11064 and 11065 of September 8, 2026 Data cited: exclusion from importation effective September 29, 2026, treatment of goods imported but not entered, scope modifications effective September 15, 2026 Source: 91 FR 58311, 91 FR 58319, 91 FR 58325, 91 FR 58331, 91 FR 58339 Published: September 14, 2026

[REF 11] CBP, CSMS #69606660, Guidance: Section 338 Additional Duties on Certain Goods of Canada Data cited: headings 9903.03.12 to 9903.03.16, HTS list, drawback, FTZ status, reporting order Source: CSMS #69606660 Published: August 2026

[REF 12] Federal Register, USTR Notice of Actions in Section 301 Investigations (forced labor) Data cited: 10% rate for Canada, USMCA exemption at heading 9903.05.93, Section 232 exemption at Note 52(f), July 24, 2026 effective date Source: 91 FR 47318 Published: July 28, 2026

[REF 13] Federal Register, Proclamation 11021 of April 2, 2026 Data cited: Section 232 metals duties on the full customs value from April 6, 2026 Source: 91 FR 18201 Published: April 9, 2026