Two days ago — April 20, 2026 — a significant update landed quietly for Canadian apparel importers. Businesses that served as the Importer of Record and paid U.S. tariffs on non-CUSMA compliant goods under the International Emergency Economic Powers Act (IEEPA) between February 4, 2025, and February 24, 2026, may now be eligible for refunds.
If your company was importing apparel or textiles into the U.S. during that window, this is worth stopping to review. The refund window won’t stay open indefinitely — and most importers haven’t had time to fully process what it means for their books.
What Happened — The Short Version
The U.S. Supreme Court struck down IEEPA as a valid basis for tariffs in February 2026. The ruling invalidated duties that had been reshaping North American supply chains for over a year. For Canadian businesses that absorbed those costs as Importer of Record, the Court’s decision opened a potential path to recovering what they paid.
The average tariff rate on U.S. apparel imports hit 35.1% in December 2025 — more than double the 14.7% rate from January of that year. For Canadian brands and retailers sourcing into the U.S. market, that kind of cost increase over 12 months wasn’t theoretical. It showed up directly in margins, pricing decisions, and sourcing restructuring.
Why This Matters for the Canadian Sourcing Market Specifically
Canada’s apparel importers were navigating two pressures simultaneously during this period: U.S. tariffs on Canadian goods coming in, and retaliatory Canadian tariffs on U.S. goods going out. The CUSMA framework offered some protection — 88.3% of U.S. apparel imports from CUSMA-eligible countries claimed duty-free benefits in the first ten months of 2025, up from 86.4% the year before. But non-compliant goods bore the full weight of IEEPA rates.
Now, with the CUSMA joint review formally beginning in July 2026, the trade environment for Canadian apparel businesses is shifting again. The companies that come out of this period in the strongest position are the ones actively managing their compliance exposure — not waiting to see how the review concludes before adjusting their sourcing strategy.
What Smart Buyers Are Doing Right Now
The importers we’re seeing move fastest are doing three things: reviewing their IEEPA tariff payments from 2025 to assess refund eligibility, stress-testing their current supplier base against multiple CUSMA review scenarios, and using events like Apparel Textile Sourcing Canada to build direct relationships with verified global manufacturers before the July review introduces new uncertainty.
That last point matters more than it might seem. Face-to-face sourcing relationships built before a policy shift give buyers options when the rules change. The companies still relying on a single sourcing corridor are the ones most exposed to whatever comes out of the July CUSMA review.
The 2026 ATS Canada show arrives in Toronto September 23–25 at The International Centre, followed by Montréal on September 28. Verified manufacturers from Bangladesh, Vietnam, India, Egypt, Pakistan, and beyond will be on the floor — exactly the diversification options Canadian buyers are actively evaluating right now.
Free to attend. Register at www.appareltextilesourcing.com.
