Canadian Retaliatory Tariffs Took Effect July 1 on Final List, Don't Apply to Goods Already in Transit

Canada imposed tariffs July 1 on products from the U.S. in retaliation for Section 232 duties on steel and aluminum products that took effect one month earlier. Tariffs begin at 10 percent and 25 percent on products found in Canada’s final list of tariff subheadings, which has some changes from an initial list released for public comment May 31 (see 1806010022), “and will remain in place until the U.S. eliminates trade-restrictive measures against Canadian steel and aluminum products,” Canada said. “The countermeasures will not apply to U.S. goods that are in transit to Canada on the day on which these countermeasures come into force,” it said.

The tariffs will be applied to goods on the list that originate in the U.S., meaning the goods eligible to be marked as goods of the U.S. under NAFTA marking rules, the Canada Border Services Agency said in a notice on implementation. Goods released from a Canadian bonded warehouse or sufferance on or after July 1 are subject to the tariffs, regardless of the date of their initial importation. Goods imported under Chapter 98 and Chapter 99 of the Canadian tariff schedule are still covered by the tariffs, with some exceptions. Goods subject to the tariffs are still eligible for drawback and the Canadian Duties Relief program, CBSA said.

The final list of goods subject to the retaliatory tariff comprises three parts. Table 1 covers steel products subject to a 25 percent tariff, and includes tariff provisions that fall in the following headings (some subheadings within these headings may not be subject to tariffs):

• Chapter 72: 7206, 7207, 7208, 7209, 7210, 7211, 7212, 7213, 7214, 7215, 7216, 7217, 7218, 7221, 7222, 7223, 7224, 7225, 7226, 7227, 7228, 7229
• Chapter 73: 7304, 7305, 7306.

Table 2 includes aluminum products subject to a 10 percent tariff, and includes tariff provisions that fall in the following headings (some subheadings within these headings may not be subject to tariffs):

• Chapter 76: 7604, 7606, 7610, 7611, 7612, 7613, 7615, 7616.

Table 3 includes other products upon which Canada is imposing retaliatory tariffs, also at a rate of 10 percent, that fall within the following headings (some subheadings within these headings may not be subject to tariffs):

• Chapter 4: 0403
• Chapter 9: 0901
• Chapter 16: 1602
• Chapter 17: 1702, 1704
• Chapter 18: 1806
• Chapter 19: 1905
• Chapter 20: 2001, 2007, 2009
• Chapter 21: 2103, 2104
• Chapter 22: 2202, 2208
• Chapter 33: 3304, 3305, 3307
• Chapter 34: 3401, 3402, 3406
• Chapter 35: 3506
• Chapter 38: 3808
• Chapter 39: 3923, 3924
• Chapter 44: 4412
• Chapter 48: 4802, 4811, 4818, 4822
• Chapter 49: 4909
• Chapter 73: 7321
• Chapter 84: 8418, 8419, 8422, 8433, 8450
• Chapter 89: 8903
• Chapter 94: 9401, 9404
• Chapter 95: 9504
• Chapter 96: 9608.

Tariff provisions in the following headings were included in the initial list Canada proposed for comment, but do not have any products covered by the final list of tariffs: 7219, 7220, 7301, 7302, 7310, 7605, 7608, 7609, 7614, 8537 and 9032.

As noted, the tariffs do not cover goods of the U.S. that were in transit to Canada as of July 1. Importers must have proof that their goods were in transit, which “may include, but is not limited to, the following documentation: sales orders, purchase orders, shipping documents (for example, a through bill of lading (TBL)), report of entry documents, and cargo control documents. Such proof may be requested at any time by a CBSA officer,” the CBSA notice said.

Exempt from the tariffs are goods of heading 9801 (conveyances or containers engaged in international commercial transportation of goods or passengers); goods of heading 9802 (conveyances temporarily imported by Canadian residents for international non-commercial transportation); goods of heading 9803 (conveyances and baggage temporarily imported by non-residents); goods of heading 9804, except subheading 9804.30.00 (travelers exemptions); and goods of heading 9805 (goods imported by a former resident of Canada returning to Canada to resume residence).