Canada has announced the imposition of new tariffs on US goods beginning on September 8, 2026. Canada’s retaliatory tariffs were introduced in response to US tariffs on Canadian goods that entered into force on August 22, 2026.
The imposition of new tariffs and counter-tariffs marks the return of a more confrontational bilateral trade relationship and has created the potential for further escalation, which will have significant implications for businesses on both sides of the border.
We provide key details and takeaways for businesses below.
New Canadian Retaliatory Tariffs & Support Measures
Canada has announced new retaliatory tariffs that will take effect on September 8, 2026. The retaliatory tariffs will apply to a broad range of US-origin goods, including cheese products, household appliances, cosmetics, agricultural equipment, motorcycles, and video game consoles.
These ‘dollar-for-dollar’ tariffs cover approximately $28 billion in goods, representing roughly 7% of US exports to Canada. The items included on the list of subject goods include US equivalents of Canadian items that are subject to US tariffs—a move which is intended to help support Canadian businesses that have lost access to the US market—while other goods target US exports from key swing states, such as in the Midwest, in order to exert pressure on the US administration in advance of the midterm elections in November.
The retaliatory tariffs will be set at 15%, 25%, or 50%, depending on the specific goods. This tiered rate structure is designed to match the rates of US tariffs imposed on Canadian goods and represents a significant escalation of Canada’s retaliatory tariff regime, under which tariffs on US goods were previously set at 25%.
Canada has indicated that it will continue to accept requests for remission—a relief measure that may provide an exemption from tariffs or a refund of tariffs paid—for businesses experiencing significant harms from retaliatory tariffs. Canada has also announced new and enhanced measuresto provide support to businesses impacted by the new US tariffs, including various loan and grant programs for businesses, and measures to facilitate and extend access to Employment Insurance for affected workers.
US Tariffs on Canadian Goods
Canada’s retaliatory tariffs are a direct response to the introduction of new US tariffs on Canadian goods that entered into force on August 22, 2026. These new 50% tariffs were imposed pursuant to three proclamations issued in response to Canada’s allegedly discriminatory treatment of US dairy, alcohol, and motor vehicle exports.
Although the US proclamations directly reference Canada’s dairy, alcohol, and automotive sectors, as we noted previously, the goods subject to new US tariffs extend far beyond those industries and cover an estimated $28 billion of Canadian goods, including a broad range of manufactured, industrial, and consumer goods.
These tariffs do not include an exemption for goods qualifying under the Canada-United States-Mexico Agreement (CUSMA), meaning that Canadian goods are subject to tariffs even if they qualify as originating under the terms of the CUSMA. The only exemptions are for energy, potash, fish, critical minerals, and goods already subject to tariffs under Section 232 of the Trade Expansion Act of 1962, such as steel and aluminum products. Drawback—a mechanism that allows for the refund of duties on imported goods that are used to manufacture other articles that are subsequently exported—remains available.
The new US tariffs have been imposed pursuant to Section 338 of the Tariff Act of 1930, a legislative authority that has never been used by a US President to impose tariffs, which is likely to be challenged in US courts.
Key Takeaways for Businesses
These tariffs are likely to materially affect businesses on both sides of the border, as both Canadian and US goods will face substantial new duties. Given the new tariffs and the rapidly evolving trade relationship between Canada and the US, businesses should consider the following steps:
- Assess the application of new Canadian retaliatory tariffs: Canadian businesses importing or purchasing goods sourced from the US should:
- assess whether items will be subject to new Canadian retaliatory tariffs;
- consider importing in advance of the imposition of tariffs on September 8, 2026; and
- identify alternative sources of supply, if available.
- Assess the application of new US tariffs: Canadian producers and exporters should similarly assess whether products sold into the US are subject to new US tariffs.
- Review and revise contracts: Businesses should consider reviewing and revising provisions that could be relevant to passing on costs, termination, or suspending obligations, including terms governing payment and price escalation, rights of termination, change-in-law, and force majeure.
- Consider Canadian government relief initiatives: Affected businesses should assess their potential eligibility to benefit from Canadian government relief measures such as loans or remission, and assemble materials that may be necessary to support such applications.
Fasken’s International Trade & Investment Law Group is available to advise importers and exporters, including with respect to the above matters, and will continue to monitor the rapidly evolving trade relationship between Canada and the US.
