Customs Notice 25-33: Steel Derivative Goods Surtax Order
1. This notice provides information on the application of the Steel Derivative Goods Surtax Order, specifically regarding surtax provisions effective , on certain steel derivative goods imported into Canada.
2. The Government of Canada is introducing this surtax to address risks associated with persistent global overcapacity and non-market policies and practices in the steel sector, which are exacerbated by restrictive trade measures taken by the United States, notably through its imposition of tariffs on imports of steel under section 232 of the Trade Expansion Act of .
3. The administration of the Steel Derivative Goods Surtax Order is the responsibility of the Canada Border Services Agency (CBSA).
Application
4. Effective , certain steel derivative goods imported into Canada are subject to a surtax in the amount of 25% of the value for duty in accordance with the Steel Derivative Goods Surtax Order. The value for duty is determined in accordance with sections 47 to 55 of the Customs Act. The Schedule to the Steel Derivative Goods Surtax Order contains a complete list of goods subject to the surtax.
5. The surtax will apply to steel derivative goods imported for commercial purposes.
6. The surtax applies to goods otherwise classifiable under a tariff item set out in the Schedule to the Steel Derivative Goods Surtax Order, including when those goods are eligible for classification under a tariff item of Customs Tariff chapter-by-chapter (T2025) of the Schedule to Canada’s Customs Tariff. Chapter 99 includes tariff items that would allow goods to receive a duty free rate or reduced duty rate.
7. Canada maintains a non-stackable policy for its surtaxes on steel. Only one of these measures can apply to a particular good, following this order of precedence:
- Surtax on steel imports over the established tariff rate quotas for non-CUSMA countries
- Either: a) surtax on U.S. steel products; b) surtax on Chinese steel products; or c) surtax on non-U.S. imports that contain steel melted and poured in China
- Surtax on steel derivative products from all countries
8. Canada’s Duties Relief and Duty Drawback Programs will be available to importers for surtax paid or owed by Canadian businesses, subject to the provisions of the Canada-United States-Mexico Agreement (CUSMA). When goods are of CUSMA (US/Mexico) origin, the goods are not subject to the limitations of CUSMA and the “lesser of two duties” determination does not apply. Therefore, in these circumstances, the goods may be eligible for full relief, if the CUSMA criteria is met, as outlined in CBSA’s Memorandum D7-4-3: CUSMA Requirements for the Duty Drawback and the Duties Relief Programs.
9. The CBSA may conduct a verification to verify whether or not the goods are subject to the surtax, including review of certificates, reports or commercial invoices supporting any claim that the goods are exempt. In instances where the importer fails to provide such documentary evidence, the CBSA may re-calculate the amount of surtax owing.
For more information, click here.
Resource: Canada Border Services Agency (CBSA)
