Order raises extra tariffs on covered Canadian goods

U.S. customs authorities must collect an additional 35% tariff on covered Canadian goods. This applies to Canadian goods that were subject to the earlier additional 25% tariff. The order keeps existing exclusions for Canadian goods that qualify for duty-free entry under USMCA. Existing tariff-stacking rules continue to apply. The Homeland Security Secretary may make technical changes to the tariff schedule through a Federal Register notice. The higher rate applies to goods entered for U.S. consumption, or removed from a warehouse for consumption, on or after 12:01 a.m. Eastern daylight time on August 1, 2025.

CBP must apply a 40% additional tariff and other lawful penalties to covered transshipped goods. This covers Canadian goods that do not qualify as originating under USMCA and that CBP determines were transshipped to evade applicable duties. The 40% tariff replaces the extra tariff that would otherwise apply under the order. Other duties, fees, taxes, charges and penalties may also apply. Consistent with applicable law, CBP may not reduce or cancel penalties for imports found to be transshipped to evade duties. Commerce and Homeland Security must publish countries and facilities linked to circumvention schemes every six months. The order applies the transshipment rule when CBP makes the required evasion determination; the agency list must be published every six months.

The Homeland Security Secretary must monitor conditions and recommend further presidential action when specified circumstances arise. The monitoring covers Canada’s steps on the illicit drug crisis and any retaliation against U.S. actions addressing the declared emergency. The Secretary must consult with State, Justice and White House national security officials. Further action is recommended only if necessary under the stated circumstances; this order does not itself impose that future action. Implementation remains subject to existing law and available funding. Monitoring and consultation continue after the order takes effect, with recommendations made when the stated conditions may indicate a need for action.