Canada's Paper Tariffs Expose Uneven Reliance on Canadian Buyers
Canada's 25% surtax schedule covers two paper products with sharply different export markets, making company sales and actual duty bills central to contract reviews.
Primary lensTrade policy
Sub-topicPolicy monitoring
Evidence base8 records used
Use casePolicy monitoring
Maine Senator Susan Collins , citing the costs facing her state's agricultural producers. The removes some products from a 50 percent duty and adds others, effective October 30. U.S. exporters selling into Canada face a separate surtax, with exposure that varies by product and customer.
Two paper products show why the answer needs more than a tariff rate. In 2025, Canada received 91.2 percent of U.S. toilet-paper exports, compared with 36.6 percent for one category of kraft paper. Both corresponding Canadian tariff items now appear in the same 25 percent surtax schedule.
For a paper manufacturer's trade-policy director, those shares are an initial screen for the next round of customer renewals. Contract priorities depend on Canadian revenue as a share of each product line's total sales and the surtax each buyer actually pays.
A 25 percent rate covers very different export markets
Canada's United States Surtax Order, SOR/2026-186 places tariff items 4818.10.00 and 4804.39.00 in Schedule 2, subject to a 25 percent surtax on qualifying U.S.-origin goods. The order took effect on September 8, 2026. The table pairs those legal classifications with the preceding full year's U.S. export values at the corresponding six-digit Harmonized System level.
Product and six-digit HS code
2025 U.S. exports worldwide
2025 U.S. exports to Canada
Canada share of worldwide exports
Canadian tariff item and scheduled surtax
Toilet paper, 481810
$202.1 million
$184.3 million
91.2%
4818.10.00, 25%
Other uncoated kraft paper and paperboard, 150 g/m2 or less, 480439
$81.1 million
$29.7 million
36.6%
4804.39.00, 25%
Calculations use annual export values for the United States as reporter in UN Comtrade for toilet paper, HS 481810 and kraft paper and paperboard, HS 480439. Each percentage divides exports to Canada by worldwide exports of the same product and year. Values are in U.S. dollars. The rates describe the Canadian schedule before applicable exceptions or remission.
The toilet-paper figure warrants a closer review of customer concentration. The export data measure neither the availability of replacement buyers nor company margins.
These are 2025 baselines. They cannot show the effect of the September 2026 counter-tariffs, and multiplying them by 25 percent would not produce a reliable estimate of current duties or lost revenue.
The missing denominator is the company's sales
An export-destination share measures how recorded export value is divided among foreign markets. To decide which customer renewal deserves attention first, the company also needs Canadian sales as a share of each product line's total sales, including the domestic market.
Consider two illustrative businesses. One exports 10 percent of its sales and sends 90 percent of those exports to Canada, leaving 9 percent of total sales tied to that market. Another exports 70 percent and sends 40 percent of its exports to Canada, putting 28 percent of total sales there. The second business has greater Canadian revenue exposure even though its exports are less concentrated in Canada.
Public geographic totals add another limitation. The Census Bureau's international trade statistics guide explains that state export figures generally follow the origin of movement to the export port, which need not be the place of production. A state ranking therefore cannot identify the factories or customer accounts that deserve priority in a manufacturer's renewal review. Use the company's sales ledger to locate that exposure.
A trade code does not establish the duty bill
The statistical comparison and Canada's legal test also differ. USITC's trade measure definitions explain that total U.S. exports include domestic exports and re-exports. A shipment leaving the United States is consequently not proof that its goods have U.S. origin for Canadian surtax purposes.
Section 1(2) of Canada's order uses the country-of-origin marking rules for CUSMA countries. The customer file needs the Canadian tariff item and evidence supporting that origin determination. A U.S. export classification alone cannot supply both. The distinction is developed in Traverse's analysis of Canada's counter-tariffs and marking origin.
Relief can change the amount actually payable. The Canadian order includes exceptions, while the United States Surtax Remission Order, sections 3 and 5 provides conditional relief for goods used in specified activities, including manufacturing, agricultural production and food or beverage packaging. Eligibility and the supporting records must be checked for the actual import. A policy director should ask the Canadian importer for the assessed surtax and any remission claim before describing a customer's cost increase as 25 percent.
The commercial consequence then depends on the contract. An importer paying the surtax may seek a lower supplier price, change order quantities or retain the higher cost. Those are questions for the account team and the contract file. None can be read from an annual export share.
Build the renewal-priority file around current accounts. For each product line, record Canadian sales as a share of total sales, then identify which customers face a verified surtax and when their price or volume terms reopen. A large account approaching renewal with a documented request for a price concession deserves an earlier discussion than a smaller account whose terms remain fixed and whose importer has established remission eligibility.
The company's capacity to serve other buyers matters too, but existing sales elsewhere do not establish that those buyers will absorb additional output on acceptable terms.
A Canadian tariff amendment, a confirmed remission decision or revised customer orders can change that priority.
Daily Trade Brief
Get the next one in your inbox.
New U.S. trade actions and the analysis that changes an import, customs, or counsel file, on weekday mornings after you confirm your address.
From reading to review
Run the numbers on your lane.
The duty calculator runs the current stack for any HTS code and origin. A free account opens full tool output, AD/CVD detail, Chapter 98 processing, and available exports.