How to Import Goods into Canada with the CBSA Tariff

If you are an importer or a customs broker who wants to import goods into Canada, you need to be familiar with the CBSA Tariff. The CBSA Tariff is a tool that helps you classify your goods according to the Harmonized System (HS) and determine the applicable tariff treatment and rates of duty. In this article, we will explain what the CBSA Tariff is, how to use it, and what are some of the benefits and challenges of importing goods under different tariff treatments.

What is the CBSA Tariff?

The CBSA Tariff is a document that contains the Canadian Customs Tariff, which is based on the World Customs Organization’s Harmonized Commodity Description and Coding System (HS). The HS is an international standard for classifying goods into categories and subcategories based on their characteristics and uses. The HS consists of 21 sections, 96 chapters, and thousands of headings and subheadings, each with a six-digit code. The first two digits indicate the section and chapter, the next two digits indicate the heading, and the last two digits indicate the subheading.

The Canadian Customs Tariff also shows the preferential tariff treatments for products coming from countries with which Canada has a free trade agreement (FTA) or other preferential arrangements. These tariff treatments can reduce or eliminate the rates of duty that apply to certain goods, depending on their origin and other criteria. For example, goods that qualify for the Canada-United States-Mexico Agreement (CUSMA) tariff treatment can enter Canada duty-free if they meet the rules of origin and other requirements of the agreement.

How to use the CBSA Tariff?

To use the CBSA Tariff, you need to follow these steps:

Identify your product and its characteristics, such as its name, description, composition, use, function, etc.
Find the appropriate section and chapter in the Canadian Customs Tariff that covers your product. You can use the alphabetical index or the guide to tariff classification for Canadian imports to help you with this step.
Find the heading and subheading that best describe your product within the chapter. You can use the notes and explanatory notes of each section, chapter, heading, and subheading to help you with this step. You can also consult the rulings for tariff classification issued by the CBSA or request one if you are unsure about your product’s classification.
Determine the applicable tariff treatment for your product based on its origin and other criteria. You can use the list of countries and applicable tariff treatments in the Canadian Customs Tariff to help you with this step. You can also consult the rules of origin and other provisions of each FTA or preferential arrangement that Canada has with other countries to help you with this step.
Calculate the rate of duty that applies to your product based on its tariff classification and tariff treatment. You can use the schedule of rates of duty in the Canadian Customs Tariff to help you with this step.

What are some of the benefits and challenges of importing goods under different tariff treatments?

Importing goods under different tariff treatments can have various benefits and challenges for importers and customs brokers. Some of these are:

Benefits

Importing goods under preferential tariff treatments can reduce or eliminate the amount of duty that you have to pay, which can lower your costs and increase your competitiveness. Importing goods under preferential tariff treatments can also facilitate trade and strengthen economic relations between Canada and its trading partners.

Challenges

Importing goods under preferential tariff treatments can require more documentation and compliance than importing goods under general tariff treatment. For example, you may have to obtain a certificate of origin or a declaration of origin from your supplier or exporter to prove that your goods qualify for a certain tariff treatment. You may also have to keep records and provide evidence of your goods’ origin if requested by the CBSA. Importing goods under preferential tariff treatments can also expose you to more risks of audits and penalties if you do not comply with the rules of origin and other requirements of each FTA or preferential arrangement.

The Impact of CBSA Tariff on the Global Demand for Steel Products

The Canada Border Services Agency (CBSA) is responsible for administering the customs tariff, which sets the rates of duty and taxes for imported goods. The customs tariff also shows the preferential tariff treatments for products coming from countries with which Canada has a free trade agreement, such as the Canada-United States-Mexico Agreement (CUSMA) . The CBSA uses rules pertaining to the origin of goods to determine which goods are entitled to a particular tariff treatment . The CBSA also monitors the import of certain products, such as steel, to protect the domestic industry from unfair trade practices and safeguard national security .

How does the CBSA tariff affect the global demand for steel products?

According to the World Steel Association, global steel demand is expected to grow by 5.8% in 2021 and 2.7% in 2022, driven by the recovery from the COVID-19 pandemic and the transition to a low-carbon economy . However, the demand outlook varies by region and sector, depending on the pace of vaccination, fiscal stimulus, infrastructure spending, and environmental policies. The CBSA tariff may have different impacts on different steel exporters and importers, depending on their trade relations with Canada and their competitiveness in the global market.

For example, the United States and Mexico are Canada’s main trading partners in steel products, accounting for 51% and 10% of Canada’s steel imports respectively in 2020 . Under the CUSMA, which came into force on July 1, 2020, most steel products originating in these countries are eligible for duty-free access to the Canadian market . However, some steel products are subject to import quotas or surtaxes under Canada’s safeguard measures, which aim to prevent a surge of imports that could harm the domestic producers . These measures may limit the growth potential of U.S. and Mexican steel exports to Canada, especially if the Canadian demand remains weak or declines due to economic slowdown or environmental regulations.

On the other hand, China is the world’s largest producer and exporter of steel products, accounting for 56% of global crude steel production and 15% of global steel exports in 2020 . China is also Canada’s second-largest source of steel imports, accounting for 14% of Canada’s steel imports in 2020 . However, China does not have a free trade agreement with Canada, and its steel products are subject to higher tariffs and stricter rules of origin than those from CUSMA countries. Moreover, China is facing increasing trade barriers and anti-dumping measures from other countries, such as the European Union and India, which accuse China of dumping cheap steel products in their markets and distorting global prices . These factors may reduce China’s competitiveness and market share in the global steel trade, including in Canada.

the CBSA tariff is one of the factors that influence the global demand for steel products. The tariff affects different countries differently, depending on their trade relations with Canada and their competitiveness in the global market. The tariff may also change over time, depending on Canada’s trade policy objectives and responses to changing market conditions. Therefore, steel exporters and importers need to monitor the CBSA tariff closely and adapt their strategies accordingly.

References:

https://reg.gg.ca/heraldry/pub-reg/project.asp?lang=e&ProjectID=2102&ShowAll=1

https://reg.gg.ca/heraldry/pub-reg/project.asp?lang=e&ProjectID=2376&ShowAll=1

https://laws.justice.gc.ca/en/c-1.4/

http://archive.newswire.ca/en/story/671091/armorial-bearings-presented-to-cbsa-by-her-majesty-queen-elizabeth-ii
https://www.livingstonintl.com/cbsa-customs-tariff-changes-for-the-canada-united-states-mexico-agreement-cusma-implementation/
https://argocustoms.com/cbsa-tariff-rules/
https://www.livingstonintl.com/cbsa-tariff-amendment-modifying-2022-customs-tariff-effective-january-1st-2022/
https://www.trade.gov/steel-countries-trade-statistics
https://www.worldsteel.org/en/dam/jcr:0474d208-9108-4927-ace8-4ac5445c5df8/World+Steel+in+Figures+2021.pdf
https://www.reuters.com/business/eu-launches-new-probe-into-chinese-steel-imports-2021-05-14/