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This article is for informational purposes only and should not be considered legal or financial advice. While we strive to provide accurate and up-to-date content, global trade policies are subject to change. Always consult with a qualified professional before making business decisions related to tariffs, imports, or pricing, especially in respect to evolving international trade laws.
If your store relies on cross-border production or delivery, even small changes in tariff policy can have a big impact. New Canada tariffs have been a hot topic lately for business owners in all industries.
In 2025, the US and Canadian governments introduced new import tariffs on a wide range of goods, causing ripple effects across fulfillment, pricing, and supply chains. Understanding how these Canadian tariffs work, what’s changed recently, and where your business might be affected is key to keeping your business running smoothly and profitably.
We’ll break down the latest changes, explain their impact on your margins, and share smart strategies to help you adapt.
Key takeaways
- In 2025, the US imposed new tariffs on Canadian imports – 25% on non-USMCA-compliant goods and 10% on energy products.
- Canada responded with a 25% tariff on US goods being imported into Canada, including steel, auto parts, electronics, and consumer goods.
- The current tariffs have introduced new costs and complexities for merchants operating across the border.
- Printify Choice helps merchants navigate tariff changes by routing orders through the most cost-effective fulfillment options, minimizing delays, and protecting profits.
What is a tariff, and how does it work?
A tariff is a tax applied by a government on goods brought in from another country. It’s generally applied at the moment the goods go through customs and typically increases the total cost of the imported products.
Governments use tariffs for various purposes, such as supporting local industries, influencing trade relationships, or generating public revenue.
For businesses, tariffs can mean higher prices on imported materials, parts, or finished goods. Those added costs often ripple through the supply chain, affecting margins, pricing decisions, and fulfillment strategies.
Types of tariffs
Tariffs are not applied uniformly. Governments use different types depending on their goals: protecting domestic production, generating revenue, or responding to foreign trading partners’ actions. Let’s look at the most common types.
Ad valorem tariffs
These tariffs are calculated as a percentage of the value of the imported goods.
For example, if an item costs $200 and has a 12% tariff, the final cost of receiving the item will be $240. The final tariff amount gets higher along with the original product cost. This type is often used to maintain price competitiveness between imported and locally produced goods.
Specific tariffs
A specific tariff is a fixed charge applied per unit, regardless of the item’s market value.
For instance, a $4 tariff per unit would stay the same whether a mug costs $5 or $50. This type of tariff is easy to impose but can have a heavier impact on lower-priced goods.
Reciprocal tariffs
Reciprocal tariffs are designed to match another country’s tariff rates to create more balanced trade conditions. They are often used in negotiations or trade agreements to promote fairness and mutual benefit.
For example, Country A charges a 10% duty on imports from Country B, then Country B might impose a 10% tariff on similar goods from Country A to maintain balance.
Retaliatory tariffs
Retaliatory tariffs are import taxes that a country imposes in response to tariffs placed on its exports by another country. They are often used as a trade policy tool to respond to new trade barriers or policy changes and can affect the flow of goods between countries. While not based on mutual agreement, they are intended to encourage negotiation between trading partners.
How are tariffs imposed, and who pays for them?
Since governments impose tariffs on imported goods, customs authorities collect them at the border when they’re entering the country. In the United States, this responsibility falls to the US Customs and Border Protection. In Canada, it’s the Canada Border Services Agency.
Who pays the tariffs?
Importers pay tariffs when goods cross the border. But it usually doesn’t stop there.
In some cases, businesses absorb the cost themselves, cutting into their margins instead of raising prices. However, most businesses pass the added expense down the line, which means the end customer often ends up paying a higher price.
In the US, for example, this can result in higher prices for American consumers and increased operational costs for companies that rely on imported materials or products. American businesses may need to seek alternative suppliers or adjust their pricing strategies to maintain profitability.
Industries affected
Some industries are hit harder by tariffs than others:
- Manufacturing (including steel and auto) relies heavily on imported raw materials.
- Retail (like apparel and home goods) faces challenges in maintaining competitive pricing when import costs rise.
- Agriculture experiences reduced export opportunities due to retaliatory tariffs from other countries.
- Technology depends on global supply chains for components and finished products.
To better understand what industries are affected, let’s take a look at current Canadian tariffs.
A breakdown of the current tariffs on Canada
The 2025 tariffs between the US and Canada have introduced new considerations for merchants relying on cross-border trade. Here’s what you need to know.
A look back: What led to this
In 2018, President Trump’s tariffs on Canadian aluminum and steel industries triggered tariffs from Canada on American products.
At the time, both countries were operating under the North American Free Trade Agreement (NAFTA), a decades-old trade deal that was eventually replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020. The goal was to modernize trade rules and reduce friction.
In early 2025, President Trump announced a new wave of tariffs to support domestic manufacturing.
Why tariffs on Canada are in place
The current US tariffs are part of a wider strategy to address trade imbalances and prioritize domestic manufacturing. The measures focus on strengthening supply chains tied to national security and key industries, like steel and energy.
In response, Canada tariffs on US goods were introduced to protect domestic businesses from the rising cost of US trade actions.
What you can expect
Current tariff rates (as of May 2025):
US tariffs on Canada
- 25% tariff on non-USMCA-compliant Canadian imports
- 10% tariff on Canadian energy exports (including crude oil, coal, and critical minerals)
Canadian tariffs on US goods
- 25% tariffs on a variety of export products from the US, including steel and aluminum products, auto imports (parts and vehicles), consumer electronics, and other goods
Prime Minister Mark Carney announced these measures in March 2025 in response to the US policy shift.
What it means for businesses
These Canadian tariffs and US duties affect base product costs, shipping fees, and which fulfillment centers are most cost-effective. For example, businesses using Canadian-based suppliers to serve US customers will see increased expenses due to added duties on imported materials and finished goods.
In sectors like apparel, automotive, and home goods, businesses need to evaluate where they source products and how they route shipments. Failing to account for these tariffs will cut into profit margins or increase prices for customers.
The outcome depends on ongoing tariff negotiations and whether current trade policies shift. While these tariffs on Canada are part of a larger plan to reshape trade policy, no formal end date has been set.
Read more about how tariffs work and the recent US and global tariff increases.
What is the economic impact of Canada’s tariffs?
Tariffs between the US and Canada don’t just affect imports – they influence the broader economy, shaping costs for companies, consumers, and entire industries.
When tariffs raise the cost of goods, businesses often face difficult choices: absorb the cost, raise prices, or adjust their sourcing. This can slow economic growth, reduce profit margins, and sometimes affect jobs tied to affected sectors like manufacturing or retail.
For example, tariffs from Canada on US exports like aluminum, food, and machinery can reduce demand for American goods. For many businesses, that results in fewer sales and tighter margins in one of the US’s top markets.
While tariffs are often aimed at strengthening domestic industries, their economic impact is complex. They increase costs, can introduce uncertainty, and push businesses to adapt fast.
Effects on print-on-demand businesses
For print-on-demand sellers, tariffs can influence costs and shipping speed. If a blank product or material is imported from a country subject to tariffs, the total fulfillment price may increase, even if it’s the same product as before.
Changes to customs duties can also slow down cross-border shipping, particularly for items flagged for reclassification. Reclassification happens when customs officials believe a product has been incorrectly labeled under the wrong tariff code. If flagged, the item must be reviewed, which delays clearance and potentially leads to additional fees if the item carries a higher tariff. This impacts delivery times and customer satisfaction.
Products sent for personal use typically fall under de minimis thresholds – a set amount that allows goods to enter a country without import taxes (still temporarily in place for Canada). But depending on their value and origin, large orders or bulk shipments may still be subject to additional charges.
Since tariffs vary by manufacturing location and fulfillment route, it’s important to review where your products are being made and shipped from. Being proactive about sourcing and routing helps minimize unexpected costs and delays.
Crush tariffs, not profits, with Printify Choice
Tariffs aren’t going away anytime soon, but they don’t have to cut into your margins. Printify Choice is your best defense against tariff disruptions, offering smarter, more cost-effective fulfillment.
Here’s how it helps.
- Automatic smart routing: You don’t have to track tariff shifts or fulfillment costs. Our algorithm finds the best Print Provider for each order based on location, stock, print quality, and price.
- Fulfillment flexibility: With more than 125 production sites worldwide (including in the US, Canada, and European markets), Printify Choice will route orders to the Provider closest to your customers. This reduces the risk of delays and extra duties from cross-border shipments.
- Fewer surprises, better margins: By using local or tariff-friendly fulfillment routes, you cut down on unexpected fees. That means more stable profit margins in uncertain times.
- Optimized for speed and cost: Printify Choice reroutes an order automatically if a tariff spikes in one region or a provider faces a stock issue, keeping your store running smoothly.
Tariffs may raise costs across industries, but with Printify Choice, you have a system built to absorb the shock and protect your profit margins.
No need to stress over which Print Provider to choose or how global trade affects your next shipment. Choice handles the heavy lifting so you can remain focused on scaling your brand.
FAQ
Yes. As of 2025, the United States has tariffs imposed on various Canadian imports, including non-USMCA-compliant goods and Canadian energy products. These Canadian tariffs were introduced as part of a broader trade strategy under President Donald Trump.
The United States currently enforces a 25% tariff rate on most Canadian goods not covered by the USMCA, and a 10% tariff on Canadian energy exports.
Yes, Canada has applied a new 25% tariff on many goods imported from the US, including steel, aluminum, and vehicles.
The average tariff rate on goods imported into Canada from the United States is approximately 11.9%. Canada maintains generally lower rates than global averages, especially under trade agreements like USMCA.
However, high tariffs are now in place on specific goods coming from the US in response to the 2025 trade policy changes, including certain industrial materials, electronics, and food products.
Conclusion
The current trade relationship between the US and Canada is shaped by evolving policy decisions from leaders like President Donald Trump and Canada’s Prime Minister Mark Carney. Although the two countries are longstanding trading partners, the recent tariff actions have changed cross-border commerce.
While these measures aim to protect the economy, they also influence companies operating across the border by increasing costs and affecting access to international markets. Merchants must understand the role of Canadian tariffs, monitor policy changes, and adapt fulfillment strategies to stay competitive. With uncertainty likely to continue, options like Printify Choice help them avoid shipping delays and keep profit margins up.
