Why did Trump tariff Canada?
He actually applied the Trade Expansion Act “Section 232” tariffs to Canadian steel and aluminum on 1st June in 2018. The citing was on national security and the need to protect US metals capacity.
The reasons behind were discussed at the time:
- Legal basis — the statute lets a president restrict imports after a Commerce review linked with national security
- Domestic supply goal — higher border costs were intended to support US steel and aluminum producers
- Trade pressure — the dispute unfolded while the US, Canada and Mexico were pushing toward the USMCA
Did the Canada tariffs stay in place?
No, the U.S. reached a May 17, 2019 agreement with Canada & Mexico in order to remove the metal duties. They intended to keep a mechanism to restore them if imports spiked.
In August 2020, the US briefly brought back a 10% tariff on specific Canadian aluminum products, then lifted it later in 2020.
Who pays tariffs and how do tariffs work at the border?
A tariff is an import tax. In accordance with the tariff definition, it is a customs duty collected when goods enter the country. And the importer of record pays it to US Customs at entry.
A shipment flow looks like the action steps below:
- Goods arrive at a US port, airport or land border
- The entry is filed and the duty amount is calculated
- The entry is filed, duties are calculated and secured — paid or covered by bond — and CBP releases the cargo
- If Customs later adjusts the entry — the duty can be recalculated
What does this mean for your books and taxes?
For inventory, the IRS cost method generally necessitates including direct and indirect acquisition costs in inventory. Those are recovered through cost of goods sold when the items are sold
In order for numbers to tie out, you can take smart actions presented below:
- Broker entry summaries and duty payment confirmations
- Freight and insurance documents used in landed-cost calculations
- Inventory costing support that matches your accounting method
Ready to talk through your import with Dimov NYC CPA?
Reach out to us for assistance for mapping tariff costs into bookkeeping. Our team stands ready to support your cash planning and year-end tax reporting.