Let's be straight with you: the Canada-China tariff situation just changed for the first time in two years, and if you're importing anything from China right now, that change probably affects your landed cost — whether you know it yet or not. This guide breaks down exactly what shifted in the 2026 trade arrangement, what tariffs still apply to your goods today, and how to plan your next order without guessing at the border.
Canada-China tariffs are the duties and surtaxes Canada applies to goods imported from China, layered on top of the standard Most-Favoured-Nation (MFN) tariff schedule that applies to most trading partners. Since October 2024, Canada has added steep surtaxes on Chinese electric vehicles, steel, and aluminum. In January 2026, following Prime Minister Mark Carney's visit to Beijing, Canada and China reached a preliminary arrangement that rolled back the EV surtax under a new quota system, extended (but didn't eliminate) steel and aluminum relief, and secured lower Chinese tariffs on Canadian canola, canola meal, lobster, peas, and crab in return.
For most of 2024 and 2025, Canada's trade posture toward China was defensive. Ottawa largely matched Washington's approach, slapping a 100% surtax on Chinese-made electric vehicles starting October 1, 2024, and a 25% surtax on a long list of Chinese steel and aluminum products starting October 22, 2024. Those measures were framed as a response to Chinese state subsidies and industrial overcapacity in both sectors, and they landed hard on any Canadian business that depended on Chinese-made vehicles, steel components, or aluminum stock. China didn't sit still either — it retaliated in early 2025 with steep tariffs on Canadian canola, canola meal, peas, and other agricultural exports, hitting Prairie farmers and the businesses that supply and process their crops.
That standoff started to thaw in January 2026. During a visit to Beijing, Prime Minister Carney and Chinese officials signed a preliminary joint arrangement addressing bilateral trade issues. The headline items: Canada agreed to replace the blanket 100% EV surtax with a tariff-rate quota — a set number of vehicles allowed in each year at the regular 6.1% MFN rate — and China agreed to slash its retaliatory tariffs on canola and several other Canadian exports. Steel and aluminum surtaxes stayed in place in principle, but Canada expanded and extended the remission program that lets specific importers apply for relief on specific product lines.
None of this means "tariffs are back to normal," and it's important not to read it that way. It means the rules changed again, in a fairly complicated, product-specific way, and the businesses that understand the details are the ones who won't overpay CBSA on their next shipment — or worse, get hit with an unexpected assessment months after their goods have already cleared and been sold.
If you run a Canadian business that imports from China — whether you're an eCommerce brand doing white label products, a retailer buying finished goods, or a manufacturer sourcing components — this arrangement touches your business in one of two ways. Either your specific product category was directly named in the surtax orders (EVs, steel, aluminum), in which case the rules changed materially and you need to re-check your classification. Or your product sits outside those categories, in which case you're still working within the standard MFN tariff schedule, but you should understand how this broader relationship shapes what might come next.
Understanding today's rates means understanding the sequence that produced them. Here's the condensed version, because the "why" matters when you're trying to predict what happens next — and because CBSA auditors and customs brokers will reference these specific orders by name when they assess your entries.
| Date | Event |
|---|---|
| October 1, 2024 | Canada imposes a 100% surtax on Chinese-made electric and certain hybrid vehicles (passenger autos, trucks, buses, delivery vans). |
| October 22, 2024 | Canada imposes a 25% surtax on a wide list of Chinese steel and aluminum products (plates, sheets, coils, bars, rods, pipes, tubes, and more). |
| Late 2024 – 2025 | Canada introduces remission orders letting some importers apply for relief on steel/aluminum surtaxes, particularly where pre-existing contracts (before August 26, 2024) or short-supply conditions apply. |
| Early 2025 | China imposes retaliatory tariffs on Canadian canola seed, canola meal, peas, and other agricultural products, hitting a market worth roughly $4 billion a year in canola seed alone. |
| January 16, 2026 | Canada and China sign a preliminary joint arrangement in Beijing during PM Carney's visit — the framework for today's rules. |
| February 11, 2026 | Canada Gazette publishes the amended China Surtax Remission Order, expanding and extending relief for specific steel and aluminum lines. |
| March 1, 2026 | New EV quota takes effect; China's reduced tariffs on canola and other products take effect; expanded steel/aluminum remissions enter into force (retroactive to January 1, 2026). |
The pattern is worth sitting with for a moment if you're building a long-term sourcing strategy around China: this relationship swung from escalation to de-escalation inside about eighteen months, and it did so through a series of executive orders and gazetted amendments rather than a single sweeping treaty. That's a structural feature of how Canada manages trade with China right now — measures get imposed by regulation, adjusted by regulation, and can be adjusted again with relatively little public runway. If you're building a five-year sourcing plan, treat the current arrangement as a snapshot of where things stand today, not a permanent fixture you can bank on for the life of a product line.
It's also worth noting what this timeline does not include: a comprehensive free trade agreement, a permanent removal of any surtax category, or a resolution of the underlying industrial policy disputes (subsidies, overcapacity, state-owned enterprise practices) that triggered the 2024 measures in the first place. This is a truce with specific, dated concessions on both sides — not a treaty.
Before 2026, the rule for Chinese EVs was simple and brutal: a flat 100% surtax on top of the regular duty, which functionally shut most Chinese-made electric and hybrid vehicles out of the Canadian market. That's gone now, replaced by something more nuanced — and more relevant if you're in the EV, e-bike component, battery, or auto parts trade.
Under the new arrangement, Canada allows a country-specific quota of Chinese-made EVs into the country each year at the standard 6.1% Most-Favoured-Nation tariff rate — not the old 100% surtax. The initial quota is 49,000 vehicles annually, set to grow to 70,000 over five years. There's a built-in equity mechanism too: the portion of that quota reserved for "affordable" EVs — priced at $35,000 CAD or less — is set to reach 50% by 2030, which signals the policy intent is partly about keeping lower-cost EVs accessible to Canadian consumers, not just protecting domestic auto manufacturing.
Vehicles imported outside the quota, once it's filled for the year, still face the full 100% surtax. That means timing matters enormously. If you're a dealer, fleet buyer, or parts importer tied to Chinese EV supply chains, you need to know where Canada is in its annual quota allocation before you commit to a shipment, because arriving after the cap is reached is the difference between a 6.1% duty and a 100% one on the same vehicle.
⚠️ Watch this: The quota resets annually and is allocated on a first-come, first-served or licensing basis depending on the mechanism CBSA and Global Affairs Canada finalize for a given year. If your business depends on Chinese EV imports, confirm quota status with a licensed customs broker before finalizing purchase orders — don't rely on last year's numbers, and don't assume your supplier or freight forwarder is tracking this for you.
This doesn't just affect car dealerships. Businesses importing Chinese-made electric scooters, certain e-bikes, low-speed electric vehicles, golf carts, and specific EV sub-assemblies (battery packs, motor controllers, charging components) should check whether their HS classification falls inside the surtax's scope, because the definitions used in the original 2024 order were broad enough to catch adjacent categories that don't look like "cars" on the surface. A business importing electric cargo trikes for last-mile delivery fleets, for example, may find itself squarely inside the surtax definition even though the product bears no resemblance to a passenger vehicle.
There's also a compliance wrinkle worth flagging: quota allocation systems like this one typically require an import permit or allocation certificate issued before the goods arrive, not something you can apply for retroactively once a container is on the water. If your business is new to the EV import space, build in extra lead time — weeks, not days — to secure your place in the quota before you finalize a purchase order with a Chinese manufacturer.
Steel and aluminum are where the 2026 arrangement gets genuinely complicated, and where a lot of Canadian importers are going to get tripped up if they assume "the deal fixed it."
The short version: the 25% surtax on Chinese steel and aluminum products imposed in October 2024 is still technically in effect. What changed is the remission program around it — the list of exceptions that let specific importers avoid paying the surtax on specific product lines.
As of the February 2026 update to the China Surtax Remission Order, Canada extended remissions through the end of 2026 and expanded the list to cover 66 product-specific tariff lines (11 with full remission, 55 with partial remission) plus 49 company-specific remission lines. On top of that, Canada added coverage for 7 additional steel products, 2 aluminum products, and 4 steel derivative products, effective by March 1, 2026, and applied retroactively to January 1, 2026.
| Category | Surtax rate (if no remission) | Remission available? |
|---|---|---|
| Chinese steel products (plates, hot/cold-rolled sheet, bars, rods, pipe, tube, stainless) | 25% | Yes — 66 product lines, partial or full, through end of 2026 |
| Chinese aluminum products (plate, sheet, strip, coil, foil, tube, bar, rod, pipe) | 25% | Yes — expanded coverage from March 1, 2026 |
| Steel/aluminum with pre-existing contracts (before Aug 26, 2024) | 25% (unless approved) | Case-by-case remission application |
| Steel derivative products (finished goods with significant steel content) | 25% on steel-content portion, varies | 4 additional lines added March 2026 |
| Products outside the remission lists | 25% — no relief | No |
What this means practically: if you import a specific gauge of cold-rolled steel sheet or a specific aluminum extrusion profile, you need to check whether your exact HS tariff line is on the current remission list — not just whether "steel" or "aluminum" generally got relief in the news coverage of the deal. The remission orders are written at the tariff-line level, sometimes down to specific dimensional or alloy specifications, and being one line off the approved list means paying the full 25% on top of regular duty, with no exceptions for "close enough."
The company-specific remission lines add another layer of complexity. Some remissions in the current order aren't available to every importer of a given product — they're tied to specific companies that applied and demonstrated a short-supply condition or a pre-existing contractual obligation predating the original surtax. If you're a new importer trying to bring in a steel product that's covered by a company-specific remission, that relief may not automatically apply to you; you may need to file your own remission application and demonstrate your own case.
Steel derivative products — finished goods that incorporate significant steel content, like certain furniture, appliances, or equipment — are a newer and less settled category. The March 2026 expansion added four steel derivative lines to the remission list, but this remains one of the areas where classification disputes are most likely, because "how much steel content triggers derivative treatment" isn't always an obvious bright line.
📌 Note: Remission is not automatic. Even when your product qualifies, you typically need to apply for it and reference the correct Order-in-Council when filing with CBSA. A customs broker familiar with the China Surtax Remission Order is worth the fee here — this is not a DIY filing situation if your shipment value is significant.
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China's retaliatory tariffs on Canadian agricultural and seafood exports were the pressure point that pushed this deal forward, and they matter to you even if you don't import a single soybean — because they're the trade-off Ottawa made to get EV and steel concessions, and they signal how fragile the overall arrangement is.
Canola seed took the hardest hit. Combined Chinese tariffs on Canadian canola seed had reached roughly 84% before the deal — effectively closing a market worth about $4 billion a year to Canadian exporters. Under the new arrangement, China is expected to bring that combined rate down to approximately 15% by March 1, 2026. That's still a real tariff, not a return to duty-free access, but it's the difference between a functioning export market and a closed one for Prairie canola producers and the crushing, processing, and export businesses built around them.
Canola meal, lobster, peas, and crab get a narrower but still meaningful concession: China has agreed not to apply its anti-discrimination tariffs to these products from March 1, 2026, through the end of the calendar year. Note the end date carefully — this is a one-year window, not a permanent fix, and Canadian exporters in these categories should treat 2027 policy as an open question rather than a settled outcome.
Why should an importer — someone bringing goods into Canada, not exporting out — care about any of this? Two reasons. First, if your business has any exposure to Canadian agricultural inputs (food manufacturing, supplement brands using canola oil, seafood processing and private-label seafood products), the health of these export markets affects your domestic input costs and supply availability. Second, and more strategically, this agricultural side of the deal is the barometer for the whole relationship. Trade negotiators on both sides treat agricultural access as politically sensitive and quick to become a flashpoint — historically, when China wants to signal displeasure with Canada on an unrelated issue, agricultural tariffs are often the first lever pulled. If you see reporting about renewed friction on canola access, treat it as an early warning sign that the EV and steel concessions could be next.
💡 Pro Tip: If your business sources ingredients or packaging tied to Canadian agricultural exports — private-label food brands, supplement companies, seafood processors — watch this file closely through late 2026. A breakdown in the agricultural side of the deal is historically what triggers retaliation on the industrial side too, and industrial-side retaliation is what raises your import costs.
Here's where most Canadian importers get confused: not every Chinese import is hit with a surtax. The EV and steel/aluminum surtaxes are narrow, product-specific measures. The vast majority of goods coming from China — apparel, home goods, electronics, toys, furniture, beauty products, kitchenware, outdoor gear — are subject only to the standard Most-Favoured-Nation tariff, the same rate that applies to imports from most other non-CUSMA, non-CPTPP countries.
That MFN rate varies enormously by product category, and it's the number that actually determines your landed cost for the overwhelming majority of container loads coming out of Ningbo, Shenzhen, Yiwu, or Guangzhou.
| Product category | Typical MFN tariff rate | Notes |
|---|---|---|
| Apparel and textiles | 17–18% | Among the highest general rates in the tariff schedule |
| Footwear | up to 20% | Varies by material and construction |
| Consumer electronics | 0–3.5% | Many electronics categories are duty-free or near-duty-free |
| Furniture | ~9.5% | Assembled vs. knock-down can affect classification |
| Auto parts (non-EV) | ~6% | Separate from the EV-specific surtax regime |
| Toys and games | 0–8% | Depends on materials and product function |
| Kitchenware (non-metal) | 0–8% | Ceramics, glass, and plastic housewares generally fall here |
| Steel and aluminum products (China) | Base MFN rate + 25% surtax (unless remitted) | See Section 4 |
| Electric vehicles (China) | 6.1% within quota / 100% outside quota | See Section 3 |
On top of whatever duty applies, every commercial import into Canada is subject to GST at 5% federally, plus provincial sales tax or HST depending on where the goods are delivered — anywhere from 0% to 10% more, layered on the duty-paid value. This is where a lot of first-time importers underestimate their true landed cost: they price the product and the freight, then get surprised at the border by duty plus GST plus provincial tax stacking on top of each other, plus brokerage fees, plus any applicable surtax.
One more nuance worth flagging: some products face "specific" duties (a flat dollar amount per unit or per kilogram) rather than "ad valorem" duties (a percentage of value). This shows up most often in categories like certain textiles, footwear, and some food products. If your product falls into one of these specific-duty categories, the percentage-based comparisons above won't apply cleanly, and you'll need to check the exact per-unit rate in the CBSA tariff schedule.
Country of origin also matters in ways that trip up newer importers. A product manufactured in China but shipped through a third country doesn't become "not Chinese" for tariff purposes just because it transits Singapore or Hong Kong on the way to Vancouver — CBSA looks at where the substantial transformation of the good actually took place, not where the bill of lading originates. Similarly, a product with Chinese components that undergoes final assembly in Vietnam may or may not qualify as Vietnamese-origin depending on how much value-add and transformation happened there, which is exactly the kind of question that matters if you're trying to access CPTPP preferential rates instead of MFN or China-specific surtax treatment. Getting a certificate of origin wrong — or assuming transshipment changes your tariff exposure — is one of the fastest ways to trigger a CBSA compliance review.
Every single one of these rates hinges on getting your Harmonized System (HS) code right. Canada uses the same international HS framework as most countries, extended with country-specific digits, and CBSA's tariff schedule is the authoritative source for what you'll actually pay.
The practical process looks like this: identify what your product is made of and what it's principally used for, search the CBSA Customs Tariff or the Canada Tariff Finder tool using plain-language terms, narrow down to the most specific 8-to-10-digit classification that matches your product, and then cross-reference that code against the current surtax orders (China Surtax Order, China Surtax Remission Order) to see if any special measures apply on top of the base rate.
Misclassification is one of the most common — and most expensive — mistakes Canadian importers make. Classify a steel bracket as "furniture hardware" instead of the correct steel-specific line, and you might miss that it's subject to the 25% surtax; classify it wrong the other way, and you could overpay duty for years without noticing. Both mistakes get worse at scale, and both can trigger a CBSA compliance review that goes back and reassesses years of past entries, not just your next shipment.
There's also a subtlety around product bundles and kits. If you're importing a product that combines multiple materials — say, a steel-framed patio chair with a fabric cushion — CBSA classification rules (the General Rules for Interpretation) determine which single HS code applies to the whole item, usually based on what gives the product its "essential character." Getting this wrong on a bundled product is an easy way to either overpay or accidentally trigger a surtax that wouldn't apply to the components individually.
⚠️ Common mistake: Relying on your supplier's HS code suggestion. Chinese factories often default to whatever code minimizes their own export paperwork or matches what they've always used for a similar buyer, not what's accurate for Canadian import purposes. Always verify independently or through a licensed customs broker before your first shipment of a new product line.
A surprising number of first-time importers don't fully understand who is legally on the hook for duties and surtaxes, and it matters more than ever with these China-specific measures in play. Under Canadian customs law, the Importer of Record — typically your business, if you're the one bringing the goods into Canada for commercial purposes — is legally responsible for accurate declaration and payment of all applicable duties, surtaxes, and taxes, regardless of what your supplier told you or what your freight forwarder assumed.
This responsibility doesn't transfer to your Chinese supplier, even if they quoted you a "landed cost" price that was supposed to include duty. If that quote turns out to be based on the wrong HS code or an outdated surtax assumption, CBSA will still assess the difference against your business, not theirs — and you may face interest and penalties on top of the shortfall if it's discovered during an audit rather than caught at the time of entry.
This is exactly why the surtax landscape matters so much right now. A Canadian business that priced out its steel imports based on 2025 assumptions, without checking whether the March 2026 remission expansion changed their specific tariff line, could be either overpaying today or — worse — under-declaring and setting themselves up for a retroactive assessment plus penalties if CBSA later determines the remission didn't apply to their specific product.
Two practical safeguards worth building into your process: first, get your customs broker to confirm in writing which surtax order and remission line (if any) applies to your specific HS code before your first shipment of a new product — not verbally, in writing, so you have a record if CBSA later questions the entry. Second, revisit that confirmation any time a new Gazette notice touches your product category, since remission lists are amended more often than most importers expect.
It's also worth understanding how this plays out if you use a sourcing agent or trading company rather than importing directly. Depending on how the transaction is structured, your Canadian business may still be the Importer of Record even when a sourcing agent handles supplier communication and logistics — so confirm explicitly, in your service agreement, who is responsible for HS classification accuracy and who absorbs the cost if CBSA later reassesses an entry. A good sourcing partner will build accurate classification into their process from day one rather than leaving you to discover a problem at the border.
Let's make this concrete with two comparisons, because the gap between "ordinary" and "surtaxed" goods is large enough to change whether a product line is even profitable.
Example one: home goods, no surtax exposure. Say you're importing a container of mid-range ceramic dinnerware, with a factory value of $40,000 USD (roughly $55,000 CAD at a typical exchange rate), shipped to the Port of Vancouver.
| Cost component | Amount (CAD) |
|---|---|
| Goods value (FOB China, converted) | $55,000 |
| Ocean freight + insurance to Vancouver | $4,200 |
| Dutiable value (CIF) | $59,200 |
| MFN duty (ceramics, ~7%) | $4,144 |
| GST (5% on duty-paid value) | $3,167 |
| Customs brokerage fee | $250 |
| Estimated total landed cost | ~$66,761 |
Example two: steel kitchenware components, no remission secured. Same freight and value assumptions, but this time the product's HS line isn't on the current China Surtax Remission Order list, so the full 25% China-specific surtax applies on top of the base MFN duty.
| Cost component | Amount (CAD) |
|---|---|
| Goods value (FOB China, converted) | $55,000 |
| Ocean freight + insurance to Vancouver | $4,200 |
| Dutiable value (CIF) | $59,200 |
| Base MFN duty (steel products, ~6%) | $3,552 |
| China surtax (25% of dutiable value, no remission) | $14,800 |
| GST (5% on duty-paid value) | $3,878 |
| Customs brokerage fee | $250 |
| Estimated total landed cost | ~$85,680 |
That's roughly $19,000 CAD more on an identical-value shipment, purely because of the surtax classification — and if that same product had qualified for a full remission under one of the 66 approved product lines, the surtax line disappears entirely and the landed cost drops back close to the first example. That's the gap between checking your HS code against the remission list before you place the order, and finding out at the border. For a business running on typical retail margins, an unplanned $19,000 hit on a single container can be the difference between a profitable product line and a loss-making one.
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Since Canada rolled out the CBSA Assessment and Revenue Management (CARM) system, every commercial importer needs a Business Number with an import-export program account, and needs to either post their own financial security or use a customs broker's security to release goods before duties are finalized. CARM is the portal where you'll see your actual duty and GST assessments, including any surtax lines that apply to a shipment.
If you're new to importing, the practical steps are: register your business for a CARM Client Portal account, set up your security (either a bond or through your broker's security arrangement), and confirm your broker is filing your entries with the correct tariff treatment codes — MFN, CUSMA, or the China-specific surtax orders where relevant. Getting this wrong doesn't just cost you money on one shipment; it can flag your importer account for increased scrutiny on future entries, which slows down your supply chain exactly when you can least afford delays.
CARM also changed how corrections work. If you discover after the fact that an entry was misclassified — say, you later realize a shipment should have qualified for a steel remission you didn't claim — you can file a correction through the portal, but there are time limits on how far back you can amend an entry and claim a refund. Don't sit on a suspected overpayment; the window to correct it closes.
📌 Note: CARM assessments are where classification errors usually surface — sometimes months after the goods have already cleared and been sold. Reconcile your CARM statements regularly, not just at year-end, so you catch problems while there's still time to correct them.
None of the tariff math above matters if your paperwork isn't in order when your container reaches Vancouver, Halifax, or Toronto. At minimum, CBSA will expect a commercial invoice showing accurate goods value and a clear product description, a packing list matching the invoice, a bill of lading or air waybill, and — for any goods potentially subject to the China-specific surtax orders — documentation supporting your HS classification and, where applicable, your remission claim.
If you're claiming a remission on steel or aluminum products, be ready to demonstrate why your specific product qualifies: the exact tariff line, the relevant Order-in-Council reference, and in some cases documentation of a pre-existing supply contract if you're relying on that basis for relief. Waiting until your goods are already at the port to assemble this paperwork is a common — and expensive — mistake, since delayed release means demurrage and storage fees stacking up daily.
For EV imports specifically, you'll also need to demonstrate your allocation under the annual quota before the goods are released at the standard 6.1% rate — this typically means securing your permit or allocation confirmation before the vehicle ships, not after it arrives in Canada.
Keep every one of these documents on file for at least six years after import, which is the standard CBSA record-retention requirement for commercial importers. This matters more than usual right now: if a future audit questions whether your steel or aluminum shipment properly qualified for a remission, or whether an EV import correctly fell within a given year's quota, the burden is on you to produce the paperwork supporting that classification — not on CBSA to prove otherwise. Businesses that store this documentation in an organized, retrievable system (rather than scattered across email threads with a freight forwarder) save themselves real pain if an audit ever comes.
It's worth being honest about how provisional this arrangement is. Several pieces of the 2026 deal are explicitly time-limited: China's relief on canola meal, lobster, peas, and crab runs only through December 31, 2026. The steel and aluminum remissions are extended "through the end of 2026," not permanently. And the EV quota, while structurally different from the flat surtax, is still a negotiated arrangement that depends on both governments continuing to cooperate.
For Canadian importers, that means three things worth planning around: first, don't assume today's rates will hold into 2027 — build a review of your landed cost assumptions into your Q4 2026 planning cycle. Second, if your business depends heavily on one narrow tariff concession (say, the canola meal exemption, or a company-specific steel remission), have a contingency plan for what happens if it lapses or isn't renewed. Third, keep watching for CBSA and Finance Canada updates — these orders get published and amended through the Canada Gazette, often with limited public notice ahead of time, and by the time a change makes mainstream news, your shipment may already be affected.
There's also a broader geopolitical dimension worth naming plainly: this arrangement sits inside a larger, still-unsettled relationship between Canada, the United States, and China on trade policy. Canada's original 2024 surtaxes were widely read as aligning with U.S. positioning on Chinese industrial policy. Any shift in U.S.-China trade relations, or in Canada-U.S. trade dynamics, could put pressure on Ottawa to revisit its own China measures in either direction — tightening or loosening — with relatively short notice.
This is also, frankly, a good moment to revisit whether China should be your only sourcing country for a given product line. A growing number of Canadian brand owners are running a China+1 strategy — keeping core China relationships for cost, capability, and speed on complex or high-volume products, while building parallel supplier relationships in Vietnam, India, or elsewhere specifically to reduce exposure to exactly this kind of policy volatility.
Vietnam is the most common second market for Canadian importers diversifying out of China, particularly for apparel, footwear, and furniture. Sourcing from Vietnam can also unlock preferential tariff treatment under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Canada and Vietnam are both members of — meaning qualifying goods can enter Canada at reduced or zero duty rates, well below the standard MFN rates shown earlier in this guide, provided the product meets the agreement's rules of origin.
That said, China+1 isn't free. Vietnamese factories often carry higher minimum order quantities for newer supplier relationships, production capacity for complex electronics and specialized manufacturing still lags China's ecosystem in many categories, and building a vetted, reliable second supplier relationship takes real time and due diligence — it's not something you do reactively in the middle of a tariff scare.
The businesses handling this transition well are the ones treating it as a multi-year strategic project rather than a panic response to any single policy announcement: they're maintaining their core China supplier for what China does best, while methodically building and testing a second-market relationship for at least one product line, so the option exists if and when they need to lean on it.
A practical way to start, if you haven't already: pick your single highest-volume or highest-risk product line — often the one most exposed to a surtax category, or the one with the thinnest margin after duty — and run a parallel quote from a Vietnamese or Indian factory alongside your existing Chinese supplier for that one item. You're not trying to replace your whole supply chain overnight; you're trying to have a tested, real-world cost and quality comparison in hand before you ever need to make a fast decision under pressure. Businesses that wait until a tariff shock actually hits before starting this process usually end up making a rushed, poorly vetted switch — exactly the outcome a China+1 strategy is meant to prevent.
This is exactly the kind of shifting landscape that trips up businesses sourcing on their own. Epic Sourcing's Canadian team tracks CBSA tariff updates, surtax remission orders, and CARM changes as part of every sourcing engagement — not as an afterthought bolted on once a shipment is already in trouble.
Through The Epic Suite, we build landed cost projections that account for current surtax and remission status before you commit to a purchase order, not after your container is already on the water. The Product Wizard helps brand owners map out product specifications early enough to catch classification risks — like steel content in a product that looks, on the surface, like a simple household item — before production even starts. Hot Source is built for Canadian businesses that need a vetted supplier and accurate duty classification fast, without spending weeks chasing HS code confirmations themselves.
Our verification reports and freight forwarding services mean you're not relying on a Chinese factory's guess about what tariff code applies to your product — you get an independent check before you pay for production, and continuous tracking of your shipment's documentation all the way to CBSA clearance. If your product touches steel, aluminum, or EV components specifically, that verification step isn't optional anymore — it's the difference between a 6–9% duty and a 25–100% one, and on a full container, that gap can run into the tens of thousands of dollars.
And if you're weighing a China+1 move, our team can help you pressure-test a second-market supplier relationship in Vietnam or elsewhere without pulling resources away from your existing China production — running both tracks in parallel until you have real data on cost, quality, and lead time before making a bigger commitment.
Not automatically. As of March 1, 2026, Canada allows a country-specific quota — starting at 49,000 vehicles annually and growing to 70,000 over five years — to enter at the standard 6.1% MFN tariff rate instead of the previous flat 100% surtax. Once that annual quota is filled, additional Chinese EVs are still subject to the full 100% surtax. If you're importing EVs or EV components, confirm current quota status with a customs broker before finalizing an order, since the quota resets annually and allocation mechanics can change year to year. Businesses that assume quota availability based on last year's figures risk committing to a purchase order that ends up facing the full surtax if the annual cap fills before their shipment arrives.
Yes, the underlying 25% surtax on Chinese steel and aluminum products imposed in October 2024 is still in effect. What changed is the remission program: as of February 2026, Canada extended and expanded relief covering 66 product-specific tariff lines and 49 company-specific lines through the end of 2026, plus new coverage for additional steel, aluminum, and steel derivative products from March 1, 2026. Whether you pay the surtax depends entirely on whether your specific HS tariff line appears on the current remission list — it is not a blanket exemption for all steel or aluminum imports, and company-specific remissions may not extend to every importer of an otherwise-covered product. Always verify your exact classification against the current Gazette notice rather than relying on general news coverage of the deal.
The shift followed a preliminary trade arrangement signed in January 2026 during Prime Minister Carney's visit to Beijing. In exchange for easing the EV surtax through a quota system, China agreed to lower its retaliatory tariffs on Canadian canola seed (from a combined rate of roughly 84% to approximately 15%) and remove anti-discrimination tariffs on canola meal, lobster, peas, and crab through the end of 2026. The EV concession was effectively traded for agricultural market access that Canadian canola exporters had lost since early 2025, when China's retaliatory tariffs closed off a market worth roughly $4 billion a year in canola seed alone.
Start by identifying the correct Harmonized System (HS) code for your product using the CBSA Customs Tariff or the Canada Tariff Finder tool. Once you have that code, cross-reference it against the current China Surtax Order and China Surtax Remission Order, both published through the Canada Gazette. Only specific EV, steel, and aluminum tariff lines are affected — most consumer goods categories (apparel, electronics, furniture, toys) are subject only to the standard MFN rate with no China-specific surtax. A licensed customs broker can confirm this before you place a purchase order, and getting this confirmation in writing protects you if CBSA later questions the classification.
For most goods, you'll pay the applicable MFN duty rate (which varies widely — from 0% for many electronics to 17–18% for apparel), plus federal GST at 5% on the duty-paid value, plus provincial sales tax or HST depending on your delivery province (0–10% additional). If your goods fall under the China-specific EV or steel/aluminum surtax regimes and don't qualify for remission, add that surtax rate (6.1% or 100% for EVs depending on quota status; 25% for non-remitted steel/aluminum) before calculating GST and provincial tax, since those are calculated on the duty-inclusive value. Don't forget to budget for customs brokerage fees and any applicable storage or demurrage charges if your paperwork isn't ready when the container arrives.
It depends heavily on your specific product classification and where Canada's annual EV quota stands when your shipment arrives. The 6.1% MFN rate applies within the quota, but goods arriving after the annual cap is reached face the full 100% surtax regardless of when you placed the order. Given that uncertainty, most sourcing advisors recommend confirming quota availability and getting a written classification opinion before committing significant capital to Chinese EV-related imports in 2026, and building extra lead time into your timeline to secure any required import permit or allocation before the goods ship.
Parts of the current arrangement are explicitly time-limited. China's relief on canola meal, lobster, peas, and crab runs only through December 31, 2026, and Canada's expanded steel/aluminum remissions are extended "through the end of 2026" rather than made permanent. Given how quickly this relationship swung from escalation (2024) to de-escalation (2026), Canadian importers should treat the current rates as the present state of a still-evolving negotiation, not a settled long-term policy, and build in periodic reviews of their landed cost assumptions — particularly heading into Q4 2026, when several of these time-limited provisions are set to expire or come up for renewal.
Not necessarily as a wholesale replacement, but diversification is worth exploring as a hedge. Many Canadian brand owners are running a China+1 strategy — keeping their core China relationship for cost and capability while building a second supplier relationship in Vietnam or another CPTPP member country, which can also unlock preferential tariff treatment below standard MFN rates. This isn't a fast process; vetting a new factory, testing quality, and negotiating workable minimum order quantities typically takes months, not weeks. The businesses that navigate policy volatility best are usually the ones that started building a second-market option before they urgently needed one, rather than scrambling after a specific tariff shock.
Possibly, but there are time limits. If a remission that applies to your product was introduced or expanded after your goods already cleared customs — for example, if your specific steel tariff line was added to the remission list in the March 2026 expansion but you imported before that date — you may be able to file a correction and refund claim through the CARM Client Portal, provided you're within the applicable amendment window. This is not automatic and generally requires your customs broker to file the correction with supporting documentation showing your goods match the newly-covered tariff line. Given the dollar amounts involved with a 25% surtax, it's worth having a broker review your import history from the past year specifically against the current remission list rather than assuming past overpayments are simply lost.
Whether you're planning your first container from China or trying to figure out if your last shipment overpaid on duty, Epic Sourcing's Canadian team is here to help.
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