Cross-border shopping and U.S. online orders just got more expensive for Canadians.
A new 25% surtax on certain American goods kicked in on March 4, 2025, as Canada retaliates against U.S. trade restrictions.
Whether you’re driving back from a shopping trip, unpacking a suitcase, or waiting for a package, this surtax could hit your wallet.
Here’s everything you need to know about how it works, what it affects, and how to prepare.
Table of Contents
Why the New Surtax Exists
Canada’s decision to impose a 25% surtax stems from ongoing trade tensions with the United States.
The U.S. recently introduced tariffs on Canadian goods, prompting Canada to respond with countermeasures.
According to the Canada Border Services Agency (CBSA), this surtax targets specific U.S.-origin goods and will remain in place until the U.S. lifts its trade-restrictive measures.
For Canadian shoppers, this means higher costs for items bought in the U.S., whether purchased in person or online.
The surtax applies to commercial shipments, courier deliveries, and goods brought back by individual travelers exceeding their personal exemptions.
With this new policy, shopping Canadian might suddenly look a lot more appealing.
When Did the Surtax Start?
The surtax officially took effect on March 4, 2025.
Since then, CBSA officers have been enforcing it at all points of entry—land borders, airports, and mail processing centers.
Whether you’re crossing the border with a trunk full of goods or waiting for a package from a U.S. retailer, you could face this additional charge.
This makes it a lingering concern for anyone planning to shop south of the border.
How the Surtax Works for Travelers
If you’re a Canadian resident returning from the U.S., you’re still entitled to duty-free personal exemptions based on the length of your trip.
Here’s a quick breakdown:
Less than 24 hours: No exemption. You’ll pay duties, taxes, and the 25% surtax on all U.S.-origin goods subject to the surtax list.
24+ hours: Up to CA$200 worth of goods can be brought back duty-free and surtax-free.
Anything over this limit incurs regular duties, taxes, and potentially the 25% surtax.
48+ hours: The exemption increases to CA$800.
Goods exceeding this amount may face duties, taxes, and the surtax if they’re on the targeted list.
For example, if you’ve been in the U.S. for 48 hours and bring back CA$1,000 worth of goods, the first CA$800 is exempt.
The remaining CA$200, if on the surtax list, would incur a CA$50 surtax (25% of CA$200), plus any applicable duties and taxes.
The surtax is assessed and collected at the border when you return.
CBSA officers will review your purchases, so keep your receipts handy to avoid delays or disputes.
How the Surtax Affects Online Orders and Packages
The surtax isn’t limited to in-person shopping.
If you order goods from a U.S. retailer and they’re shipped to Canada via mail or courier, you could face the 25% surtax upon delivery.
Here’s how it works:
Identification: The CBSA identifies U.S.-origin goods based on their tariff classification and country of origin.
Payment: Typically, the shipping company (e.g., FedEx, UPS, or Canada Post) pays the surtax on your behalf at the border.
They then bill you for the amount, which you’ll need to settle when the package is delivered.
No Ban: Goods on the surtax list aren’t prohibited from entering Canada—they just come with an extra cost.
For instance, if you order a CA$100 item from a U.S. website and it’s on the surtax list, you might be charged an additional CA$25 when the package arrives, on top of any regular duties and taxes.
What Goods Are Affected?
Not all U.S. goods face the surtax—only those listed in the United States Surtax Order (2025-1).
The full list is available on Finance Canada’s website, but here are some examples of commonly affected items:
Food and Beverages: Orange juice, peanut butter, coffee, beer, wine
Household Items: Appliances, cosmetics
Clothing and Accessories: Apparel, suitcases
Other Goods: Wood products, certain meats, dairy products
Exemptions do exist.
For example, goods in transit to Canada before March 4, 2025, and certain original equipment manufacturer (OEM) items, like tires used in vehicle production, are not subject to the surtax.
Gasoline is also exempt, offering some relief for cross-border drivers.
To check if your purchases or online orders are affected, consult the complete list on Finance Canada’s website or contact the CBSA for clarification.
How to Prepare for the Surtax
Whether you’re planning a cross-border shopping trip or expecting a U.S. package, preparation is key to avoiding surprises. Here are some tips:
Know Your Exemptions: Understand your personal exemption limits based on the duration of your trip.
Stay within these limits to avoid duties, taxes, and the surtax.
Check the Surtax List: Before shopping, review the list of affected goods to determine if your purchases will incur the extra charge.
Keep Receipts Handy: At the border, CBSA officers may ask for proof of purchase. Having receipts readily available can speed up the process.
Monitor Border Wait Times: Crossings may be busier due to increased scrutiny. Check CBSA’s border wait times online before heading out.
Use Advance Declaration: If arriving by air, consider submitting an Advance Declaration to streamline your entry.
Track Packages: For online orders, monitor tracking updates and be prepared to pay the surtax upon delivery.
Why Shop Canadian Instead?
With the new surtax in place, buying Canadian-made goods becomes a more cost-effective and hassle-free option.
Here’s why:
No Surtax: Canadian goods aren’t subject to the 25% surtax, saving you money on eligible purchases.
Support Local Businesses: Shopping locally supports Canadian retailers, manufacturers, and the economy.
Avoid Border Hassles: No need to deal with border inspections, wait times, or unexpected fees.
Simplified Online Shopping: Ordering from Canadian websites eliminates the risk of surtaxes and reduces shipping delays.
As trade tensions persist, the incentive to “buy Canadian” grows stronger, offering both financial and practical benefits.
The Bigger Picture: Trade War Implications
The surtax is part of a broader trade war between Canada and the U.S., sparked by U.S. tariffs on Canadian exports.
Canada’s initial response targets CA$30 billion worth of U.S. goods, with the potential for further escalation if tensions don’t ease.
For consumers, this means higher prices and fewer savings on cross-border shopping—a tradition for many Canadians, especially those near the border.
Retail experts, like Craig Patterson of Retail Insider, predict a significant impact on shopping behavior.
“If individuals have to pay a tariff over a personal amount, that will deter people from shopping in the United States,” Patterson told the Vancouver Sun.
The surtax also affects commercial importers, potentially raising the cost of U.S.-sourced products in Canadian stores.
This could lead to broader price increases, making it even more appealing to seek out Canadian alternatives.
What’s Next?
The CBSA and Canadian government are working with trade partners, including couriers and the Universal Postal Union, to implement the surtax across all importation streams.
Until the U.S. lifts its tariffs, the surtax will remain a fixture for Canadian shoppers.
For now, Canadians must adapt to this new reality.
Whether it’s rethinking cross-border trips, prioritizing local purchases, or budgeting for extra costs on U.S. packages, awareness and preparation are essential.
The new 25% surtax on U.S. goods is a game-changer for Canadian shoppers.
From border crossings to online deliveries, this retaliatory measure adds a layer of cost and complexity to buying American.
By understanding how it works, knowing what’s affected, and preparing accordingly, you can minimize its impact on your wallet.
Better yet, consider shopping Canadian.
With no surtax, fewer hassles, and the chance to support local businesses, it’s an option that’s hard to ignore.
As trade tensions continue, staying informed will be your best defense against unexpected costs.
For the latest updates on the surtax and affected goods, visit Finance Canada’s website or contact the CBSA directly.
Happy shopping—and happy saving
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