Tariffs in Canada: What’s The Latest?

On July 20, 2026, President Donald Trump signed three proclamations imposing additional tariffs on a range of Canadian goods. Barring breakthrough negotiations (or yet another round of presidential backtracking), the new 50% levies are set to take effect on August 19.

The list covers more than 500 product categories and is estimated to affect nearly US$20 billion in Canadian exports to the U.S. The full list is available here. Exemptions include energy products, potash, fish, critical minerals, and goods already subject to Trump’s Section 232 tariffs (including steel, aluminum, copper, lumber and certain semiconductors).

Before signing the proclamations, Trump had mused on social media about using tariffs to punish Canada for the wildfire smoke streaming across the border. But Trump’s official justification for the impending tariffs is Canada’s "discriminatory treatment of U.S. commerce,” particularly its dairy, alcohol and automotive industries.

Section 338 of the Tariff Act of 1930 allows the president to implement additional tariffs of up to 50% if U.S. products are the target of unfair treatment by another country.

The argument is that Canada’s tariffs on U.S. automobiles and restrictions on American alcohol are discriminatory because other countries do not receive similarly punitive treatment. Missing from this calculation, however, is that both measures came as retaliation against Trump’s initial wave of tariffs.

Trump’s gripe about dairy products is a little more complicated. Canada allows retailers to access its quota for European cheese imports but excludes them from the equivalent quota for U.S. cheese, potentially giving European producers an advantage. Canada’s broader dairy system can also result in tariffs of 200% or more on imports that exceed predetermined thresholds. While those tariffs may be extreme, some may see them as protectionist rather than discriminatory.

That argument isn’t likely to work on Trump, who seems bent on capitulation. With the Canada-US-Mexico Agreement no longer providing a buffer for the goods covered by these tariffs, he might just get it.

Or maybe he’ll reverse course before August 19 and act like this new threat never happened.

A country may put tariffs into place for a variety of reasons, such as:

Trump's earlier justification for the tariffs mostly focused on the "flow" of fentanyl and undocumented immigrants into the U.S. from Canada — claims with little statistical basis that proved somewhat useful as a bargaining chip.

"The United States has justified its most recent trade action on the basis of the cross-border flow of fentanyl, despite the fact that Canada accounts for only 1% of U.S. fentanyl imports and has been working intensively to further reduce these volumes," Carney stated on August 1, 2026.

The tariffs announced on July 20, 2026 instead cite Canada’s allegedly discriminatory treatment of U.S. commerce.

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On September 1, 2025, Canada removed the counter-tariffs that had been placed on U.S. goods since March 2025. Prior to the repeal, tariffs had affected over 1,800 goods, including:

Counter-tariffs are still being charged on U.S. steel, aluminum and automobiles.

Whatever the intention, tariffs often have negative consequences for consumers — in both countries involved.

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The potential effects of Trump’s tariffs on Canada include:

Canada exports billions of dollars in goods and services to the United States each day.

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If demand for these goods were to suddenly dry up because American companies don’t want — or can't afford — to pay tariffs, it could have dire consequences for the economy, adding to broader fears of a recession.

While a recession has yet to reveal itself, tariffs are chipping away at Canada’s economic growth. The Bank of Canada highlighted weak export activity in its January 2026 Monetary Policy Report, calculating that exports dipped by approximately 4% since tariffs were implemented.

“Growth in gross domestic product (GDP) likely stalled in the fourth quarter [of 2025],” the Bank wrote. “Quarterly growth has been volatile, largely due to sharp movements in trade and inventories.”

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At their simplest, tariffs are taxes applied to goods that are imported from a foreign country. Tariffs aren’t new, in fact, nearly all developed countries impose some kind of tariff.

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There are a few main types:

Who pays tariffs?

Tariffs are paid by the companies who import foreign goods — not the exporting countries.

The U.S. companies that import Canadian goods will pay the tariffs announced by Trump. Canadian companies will pay the tariffs maintained by Carney.

Companies often raise their prices to offset the cost of tariffs. In these cases, consumers might wind up “paying for” the tariffs, but they don’t literally pay the tariffs themselves.

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This story will be updated as events progress.