Tariffs in Canada: What’s the Latest?

Wine, cheese, plywood, furniture, clothing, fishing rods and hockey sticks are among the Canadian products now facing a 50% U.S. tariff.

President Donald Trump signed three proclamations on July 20, and the levies took effect August 22 after a three-day reprieve. Together, they cover more than 500 tariff lines and C$27.6 billion — nearly US$20 billion — in Canadian exports, or roughly 5% of U.S. goods imports from Canada. The proclamations are named for motor vehicles, alcoholic beverages and dairy, but their annexes reach much further. The three product lists are linked from the White House fact sheet

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The tariffs do not apply to energy, potash, fish, critical minerals or goods already subject to national-security tariffs under Section 232 of the Trade Expansion Act (including steel, aluminum, automobiles, copper, lumber and certain semiconductors).

Before signing them, Trump had mused on social media about using tariffs to punish Canada for the wildfire smoke streaming across the border. That didn’t make it into the proclamations. The White House instead says the tariffs answer Canada’s “discriminatory treatment of U.S. commerce,” particularly in its dairy, alcohol and automotive sectors.

Section 338 of the Tariff Act of 1930 allows the president to implement additional tariffs of up to 50% to offset another country’s discrimination against or unequal treatment of U.S. commerce.

The U.S. argument is that Canada’s tariffs on U.S. automobiles and restrictions on American alcohol are discriminatory because other countries do not receive similar 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 is a little more complicated. Canada's tariff-rate quotas for U.S. cheese are more restrictive than the quotas it grants European cheese, even though Canada has trade agreements with both — a gap that can advantage European producers. Canada's broader supply-management system can also trigger tariffs of 200% or more on imports above set thresholds. While those tariffs may be extreme, some may see them as protectionist rather than discriminatory.

That argument didn't work on Trump, who appears intent on extracting further concessions. Because the Section 338 tariffs apply regardless of whether a good originates under the Canada-United States-Mexico Agreement (CUSMA), the trade deal no longer shields the products on these lists.

Canada responded in kind, announcing on August 25 tariffs of 15%, 25% and 50% on C$27.6 billion of U.S. imports, effective September 8. The federal government says it suspended negotiations after the U.S. proposed new terms that were not in Canada’s best interest.

Trump has since threatened to set tariffs on all Canadian cars, trucks and automotive parts at 50% beginning January 1, 2027. That increase has not been formally implemented. His post also named steel, although Canadian steel already faces a 50% U.S. tariff.

According to reporting on the collapsed talks, the deal on the table would have cut the top-line tariff on Canadian cars and light trucks from 25% to 15% and lowered steel and aluminum tariffs from 50% to 25%.

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

Trump's earlier justification for the tariffs on Canada mostly focused on the “flow” of fentanyl and undocumented immigrants into the U.S. — claims with little statistical basis that proved somewhat useful as a bargaining chip. Those tariffs were struck down by the Supreme Court in February 2026.

“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 said on August 1, 2025.

The tariffs that took effect on August 22, 2026, cite something different: Canada's allegedly discriminatory treatment of U.S. commerce.

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On August 25, 2026, Canada announced counter-tariffs of 15%, 25% and 50% on C$27.6 billion of goods imported from the U.S.

The measures take effect September 8 and will match the latest U.S. tariffs “dollar for dollar, rate for rate,” according to the federal government. The list is drawn from products the U.S. has targeted under Section 338 and Section 232, with each Canadian rate matching the corresponding U.S. rate.

The new tariffs focus on sectors including steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Products facing the 50% rate include steel and aluminum goods that previously faced a 25% counter-tariff, plus furniture, plus plus furniture and apparel. Appliances, dairy products such as cheese, fish and seafood, and certain steel and aluminum derivative products are among those facing 25% tariffs.

Canada also announced a C$7.5 billion package of new and expanded support for workers and businesses affected by U.S. tariffs, on top of nearly C$25 billion provided since the tariffs began.

Canada had previously removed most of the counter-tariffs it placed on U.S. goods in March 2025. Before that change took effect on September 1, 2025, Canadian counter-tariffs covered roughly C$44 billion in U.S. imports, including:

Existing counter-tariffs on U.S. steel, aluminum and automobiles remain in place. The new measures raise tariffs on some steel and aluminum products from 25% to 50% and extend them to additional goods. Canada's tariff remission framework also remains available for businesses seeking exceptional relief.

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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The two countries traded an estimated US$872.3 billion in goods and services in 2025, according to the Office of the U.S. Trade Representative — nearly US$2.4 billion a day, and down 4.6% from 2024.

A sustained drop in U.S. demand for Canadian exports could weigh on economic growth and increase the risk of a deeper downturn.

Canada enters this latest escalation with little economic cushion. Its economy met a common technical definition of a recession in the first quarter of 2026 after real GDP contracted for a second consecutive quarter.

Both declines were shallow — an annualized 1% drop in the fourth quarter of 2025 and 0.1% in the first quarter of 2026 — and the economy rebounded afterward, with Statistics Canada's preliminary estimate pointing to annualized growth of about 3.4% in the second quarter. But the latest escalation creates fresh risks for Canadian exports, businesses and employment.

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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.