IEDC Update on U.S.-Canada Tariffs

The latest

The U.S.-Canada trade relationship has entered another phase following the implementation of new Canadian counter-tariffs on September 8 and additional actions announced by the United States the same day.

The developments follow months of negotiations between the United States and Canada over tariffs and other trade issues. Trade negotiations were suspended on August 27, and Canada subsequently moved forward with new counter-tariffs on U.S. goods.

Canada's new counter-tariffs took effect at 12:01 a.m. on September 8. They impose tariffs of 15%, 25%, and 50% on products covering approximately $27.6 billion in U.S. imports, with the rate for each product matching the corresponding U.S. tariff. The impacted products include goods in sectors like steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, furniture, clothing, and electronics.

In response, the U.S. announced additional actions on September 8, with the White House issuing five proclamations under Section 338 of the Tariff Act of 1930, including new import bans on certain Canadian products and changes to the products subject to the existing Section 338 tariffs. The changes to the tariff lists take effect September 15, while the new import bans take effect September 29.

What are the Section 338 tariffs?

Section 338 is a provision of the Tariff Act of 1930 that gives the President authority to impose additional tariffs on imports from a country when the administration determines that the country is treating U.S. commerce unfairly or unequally.

The Trump administration is using this authority to impose additional 50% tariffs on certain Canadian products. The tariffs apply to specified goods, including certain alcoholic beverages, dairy products, and motor vehicles, as well as other products identified by the administration. They are separate from tariffs imposed under other authorities, including Section 232 tariffs, which are directed at specific products on national-security grounds, including steel and aluminum.

On September 8, the White House modified the list of Canadian products subject to the Section 338 tariffs. Some products were removed and others were added, with those changes taking effect September 15. The administration also used Section 338 authority to prohibit certain Canadian products from entering the United States beginning September 29.

Current tariff actions at a glance

U.S. actions 

• Section 338 tariffs: The United States imposed additional 50% tariffs on specified Canadian products beginning August 22. These are tariffs imposed under Section 338 of the Tariff Act of 1930 in response to what the administration considers discriminatory treatment of U.S. commerce by Canada.
• September 15 changes: The White House has modified the list of Canadian products subject to the Section 338 tariffs. The additions and removals take effect September 15.
• September 29 import bans: The White House has ordered certain Canadian products, including specified alcoholic beverages and dairy and motor-vehicle-related products, to be excluded from entry into the United States beginning September 29.
• Section 232 tariffs: Separate Section 232 tariffs, including tariffs affecting steel, aluminum, and other products, remain in effect. The Section 338 measures are separate from these tariffs.
• Federal purchasing: The White House also directed the U.S. Trade Representative and General Services Administration to remove $50 billion worth of Canadian-origin products from GSA's Multiple Award Schedules.

Canada's actions

• Effective September 8: Canada implemented new counter-tariffs covering approximately $27.6 billion in U.S. imports.
• Rates: The new tariffs are 15%, 25%, or 50%, depending on the product, with the rate matching the corresponding U.S. tariff.
• Affected sectors: The measures include products in sectors such as steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, furniture, clothing, and electronics.
• Existing measures: Canada's existing counter-tariffs, including those affecting U.S. automobiles, remain in place.
• Business support: Canada has announced a new $7.5 billion package of measures to support workers and businesses affected by U.S. tariffs. The package includes additional funding through Canada's regional development agencies, new Business Development Bank of Canada liquidity support, the Canada Strong Diversification Fund, and worker and employer support programs.

What happens next?

The immediate dates to watch are September 15, when changes to the products covered by certain U.S. Section 338 tariffs take effect, and September 29, when the new U.S. import bans on certain Canadian products are scheduled to begin.

The broader U.S.-Canada trade relationship remains unsettled. Canada has suspended formal trade negotiations, and neither country has announced a date for negotiations to resume. The USMCA joint review that began July 1 remains a separate process from the current tariff actions.

For economic developers, the continued uncertainty is particularly significant given the highly integrated nature of the U.S. and Canadian economies and supply chains. Tariff changes can affect manufacturers, exporters, importers, and businesses that rely on cross-border suppliers, components, and customers.

Updated Resources

U.S. Government

• White House Fact Sheet: President Trump Responds to Canada's Retaliation — September 8, 2026
• White House: September 8 Proclamation Modifying Section 338 Tariffs on Canadian Products
• White House: September 8 Proclamation Excluding Certain Canadian Dairy Products from Importation
• White House Fact Sheet: President Trump Imposes Additional Tariffs on Canada — July 20, 2026
• White House: Section 338 Proclamation on Canadian Motor Vehicles — July 20, 2026

Canadian Government

• Government of Canada: List of U.S. Products Subject to Counter-Tariffs Effective September 8, 2026
• Government of Canada: Complete List of U.S. Products Subject to Counter-Tariffs
• Government of Canada: Countermeasures and $7.5 Billion in Support for Workers and Businesses — August 25, 2026
• Government of Canada: August 27 Update on Countermeasures and Support

IEDC members can continue to:

• Stay informed: Monitor official U.S. and Canadian government communications for changes to tariff rates, affected products, and implementation dates.
• Assess local impacts: Identify industries and businesses in your region that rely on Canadian markets, Canadian suppliers, or cross-border supply chains.
• Engage with affected businesses: Talk with local businesses about how the tariffs are affecting costs, customers, investment decisions, and supply chains.
• Watch for supply-chain shifts: Businesses may look for alternative suppliers, customers, or markets in response to the changing tariff environment.
• Keep IEDC informed: Share significant impacts you are seeing in your communities or regions so we can better understand the economic development implications.

IEDC will continue to monitor developments and provide additional updates and resources as the situation evolves. Please do not hesitate to reach out to us with questions or information about impacts you are seeing in your communities.