Ottawa’s latest retaliation against U.S. tariffs looks sweeping on paper, but the amount companies actually pay is becoming more complicated. Canada’s September 8 countermeasures cover $27.6 billion worth of U.S. imports and impose surtaxes of 15, 25 or 50 per cent across hundreds of tariff classifications. Yet an analysis of existing remission orders found that roughly one-third of the 629 newly targeted U.S. tariff items already have access to some form of relief. Among roughly 300 steel and aluminum items, the proportion rises above three-fifths. That does not mean one-third of the $27.6 billion is automatically exempt. Instead, it shows how Ottawa is trying to retaliate against Washington while limiting collateral damage to Canadian companies that still depend on American inputs.
Ottawa’s Countertariffs Cover $27.6 Billion in U.S. Imports
Canada announced the latest countermeasures on August 25 after the United States moved ahead with additional duties on Canadian products under Section 338 of the U.S. Tariff Act and existing Section 232 measures. The Canadian response took effect September 8, applying surtaxes of 15, 25 or 50 per cent depending on the product. Ottawa said the measures cover $27.6 billion in imports and are concentrated in sectors including steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics. The rates generally correspond to those applied by Washington to comparable Canadian goods.
Legally, the new surtax applies to goods classified under the schedules contained in the United States Surtax Order (2026). Canadian regulations define the affected imports according to their tariff classification and whether they qualify to be marked as U.S. goods under the CUSMA-country marking rules. That distinction matters because the headline number of 629 refers to tariff items rather than 629 individual consumer products sitting on store shelves. One tariff classification can encompass numerous variations of a product, while another can represent a highly specialized industrial component.
The One-Third Figure Needs an Important Qualification
The finding that roughly one-third of the 629 tariff items already have some tariff relief is striking, but it should not be read as saying one-third of the $27.6 billion in imports will escape the surtax. The analysis examined published product-specific remission orders and identified tariff classifications that overlap with the new countertariff list. Some exemptions are available broadly, while others apply only to a particular importer, a precisely described product, a particular end use or a specified period.
That makes calculating the dollar value of the relief much more difficult than simply counting tariff codes. One example cited in the reporting involves corrugated paper cartons and boxes. Canada imported hundreds of millions of dollars’ worth of goods in that broad trade category in 2025, yet a remission can describe eligible boxes using exact specifications and measurements. Only part of the imports reported under the larger tariff classification may therefore qualify. The one-third statistic is best understood as evidence that the remission regime overlaps extensively with Ottawa’s new tariff schedule—not as a calculation showing one-third of tariff revenue disappearing.
Steel and Aluminum Have the Biggest Relief Overlap
The overlap becomes particularly significant in steel and aluminum. The review of remission orders found that more than three-fifths of the roughly 300 steel and aluminum tariff items included in the new measures already have some type of relief associated with them. That is important because Ottawa increased certain steel and aluminum countertariffs to 50 per cent as part of its September response, making the difference between paying the full rate and qualifying for remission potentially substantial for a manufacturer buying American material.
The extensive relief is not accidental. In June, the federal government announced plans to extend existing horizontal tariff relief for eligible U.S. steel and aluminum products for another year, generally to June 30, 2027. Canadian regulations also provide remission for certain steel and aluminum goods used in automotive and aerospace production. Ottawa is therefore using two policies simultaneously: tariffs intended to support Canadian producers against U.S. competition, and exemptions intended to prevent those same tariffs from making indispensable industrial inputs prohibitively expensive when a practical Canadian alternative does not exist.
Remission Is an Exception, Not an Automatic Escape Hatch
Canada’s remission process is designed around what the Department of Finance describes as exceptional circumstances. Businesses can seek relief when an input cannot be sourced domestically, either nationally or regionally, and cannot reasonably be obtained from a non-U.S. supplier. Ottawa can also consider other cases where the tariff would create severe adverse consequences for the Canadian economy. The government says those circumstances must be compelling enough to outweigh the policy rationale behind imposing the tariff in the first place.
Applications require far more than a statement that tariffs are expensive. Companies may need to provide their business number, import volumes and values, tariff classifications, invoices, evidence of unsuccessful attempts to find Canadian or non-U.S. suppliers, manufacturing-cost information and details about employment and investment. Finance Canada may also consult domestic producers before recommending relief. Ultimately, remission orders are made under the Customs Tariff through the Governor in Council. Only companies registered in Canada can apply through this process, making remission a targeted policy mechanism rather than a general reduction in the published tariff rate.
Ottawa Is Trying to Avoid Taxing Canadian Production Along With U.S. Goods
Retaliatory tariffs can create a difficult problem in industries where an imported American product is not a finished consumer good but an ingredient in something manufactured in Canada. Raising the price of a U.S.-made appliance is one thing; applying a 50-per-cent duty to a specialized piece of steel that a Canadian factory needs to produce another product can raise the Canadian company’s costs as well. Ottawa’s remission framework effectively acts as a pressure valve for those situations.
The Bank of Canada has repeatedly highlighted this issue. Its analysis of tariffs notes that duties on intermediate inputs can raise production expenses, reduce business profit margins and eventually feed into consumer prices. The central bank has identified industries with deeply integrated supply chains—particularly automotive manufacturing—as especially sensitive because components can cross the Canada-U.S. border multiple times during production. That helps explain why the remission system has evolved alongside Canada’s countertariffs rather than being treated as a separate or temporary administrative curiosity.
Previous Tariff Rounds Show How Large Remissions Can Become
The federal government’s own fiscal numbers demonstrate that remission is capable of materially reducing the amount of tariff revenue Ottawa ultimately keeps. In the 2026 Spring Economic Update, the government reported that $9.7 billion in gross revenue had been assessed through Canadian countermeasures responding to U.S. tariffs. Of that amount, $5.5 billion had been remitted to mitigate the impact of the measures on the Canadian economy. Net assessed revenue stood at approximately $4.3 billion and remained subject to revision.
Those figures relate to earlier rounds of Canadian countermeasures and should not be treated as a forecast for the new $27.6-billion package. They nevertheless illustrate the scale at which tariff relief has already operated. Gross tariff assessments and the money ultimately retained by government can diverge substantially once approved exemptions, refunds and remission programs are included. That is why the face value of a countertariff package is useful for measuring the trade being targeted, but it does not necessarily reveal the final amount collected from Canadian importers.
Integrated Supply Chains Make a Clean Canada-U.S. Split Difficult
The economic relationship between the two countries helps explain why Ottawa faces pressure to preserve exemptions. Statistics Canada found that of $922 billion in Canadian-produced exports in 2024, $644 billion went to the United States. Producing those U.S.-bound exports required approximately $118 billion in imports from the United States. Another $34 billion in American imports was embedded in Canadian exports destined for countries other than the U.S.
Manufacturing illustrates the relationship particularly clearly. Canadian manufacturers shipped approximately $324 billion in goods to the United States in 2024, and more than one-quarter of that value reflected imported U.S. content. The Bank of Canada has similarly found that American inputs make up roughly one-fifth of the value of Canadian exports to the United States on average. In that environment, retaliatory tariffs can strike goods that are technically American imports but are economically part of a Canadian production chain. Relief can protect those operations while companies search for domestic or overseas alternatives—a transition the Bank has found can be expensive and slow.
Some Exemptions Are Remarkably Specific
The federal remission schedules show why counting exempt tariff classifications cannot reveal the precise amount of trade receiving relief. Some exemptions cover clearly identifiable goods such as specialized infant formulas, medical compression garments and certain health-care equipment. Others describe industrial materials using technical specifications that can include a particular steel grade, thickness, width, coating or manufacturing standard. Some entries are linked to a specific Canadian business number or limited to goods destined for a particular customer.
Timing can vary just as much. Certain remissions have expiry dates designed to give businesses a transitional period, while other listed products do not have the same short-term limitation. Canada’s current order also includes broad, or “horizontal,” relief based on how goods are used. Eligible imports can include goods used for health care and public safety as well as inputs for manufacturing, processing, agricultural production and food-and-beverage packaging, subject to the applicable conditions. As a result, two importers bringing merchandise under the same broad tariff heading can face very different outcomes depending on the exact product and how it will be used.
More Relief Requests Could Widen the Gap
Existing remission orders may not represent the final extent of relief from the September countertariffs. Reporting based on information from the Department of Finance says Ottawa has already been receiving requests connected to the new measures. The department said it had received more than 1,800 remission requests involving U.S. surtaxes since March 2025, while cautioning that a single application can cover hundreds of products.
That pipeline means the list of tariffed products and the effective tariff burden could continue to evolve even if the published rates remain unchanged. Some applications may be rejected, while others could eventually result in company-specific or product-specific relief. Finance Canada’s official process requires evidence that domestic or reasonable non-U.S. sourcing is unavailable, or that exceptional circumstances justify intervention. In practical terms, Ottawa is continually balancing two competing objectives: maintaining pressure on U.S. imports while avoiding outcomes that significantly damage Canadian production, employment or investment. The government’s own framework explicitly requires those competing public-policy considerations to be weighed before relief is approved.
Relief Could Also Change How Much of the Tariff Reaches Consumers
The extent of remission matters beyond corporate balance sheets because Canadian import tariffs can eventually influence retail prices. A June 2026 Bank of Canada staff working paper examined product-level pricing during an earlier episode of Canadian retaliatory tariffs. Researchers found that prices of tariffed goods increased gradually and peaked at roughly 6 per cent after three months, representing approximately one-quarter pass-through of a 25-per-cent tariff. Price effects reversed relatively quickly after the tariffs were removed.
That research does not mean the new September tariffs will produce identical price changes. The latest package involves different products, rates and exemptions, and businesses can respond by absorbing costs, switching suppliers or changing where goods are sourced. It does demonstrate why remission can matter economically even when the official tariff remains 25 or 50 per cent. Ottawa’s new measures therefore have two layers: the public tariff schedule establishing the maximum countermeasure on targeted American goods, and a growing collection of relief mechanisms determining what qualifying Canadian importers actually pay. The difference between those two will become increasingly important as more remission applications are decided.
