U.S. Implements Section 338 Tariffs on Canadian Imports as Canada Announces Counter-Tariffs
Section 338 Canadian Tariffs
The U.S. has officially implemented its first-ever Section 338 tariff, imposing a 50% duty on certain Canadian imports effective August 22, 2026, following unsuccessful trade negotiations between the two countries.
The tariff impacts approximately $20 billion worth of Canadian exports, including products such as alcoholic beverages, cosmetics, textiles, machinery, furniture, and other consumer goods. Several categories remain exempt, including energy products, potash, Section 232 goods, and certain critical minerals.
Canada’s Response to Section 338 Tariffs
According to Canada’s Department of Finance, counter-tariffs of 15%, 25%, and 50% will be applied to hundreds of U.S. products that fall under the U.S. Section 338 and Section 232 tariff actions.
Key highlights include:
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50% tariffs will apply to products such as steel and aluminum items that were previously subject to a 25% counter-tariff, along with furniture, clothing, and apparel.
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25% tariffs will apply to appliances, dairy products, fish and seafood, and certain steel and aluminum derivative products.
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Existing Canadian counter-tariffs on U.S. goods, including automobiles, will remain in effect.
These new measures will take effect at 12:01 a.m. on September 8.
However, goods already in transit to Canada before that time will not be subject to the tariffs.
The counter-tariffs apply only to products of U.S. origin that qualify to be marked as U.S. goods under Canadian origin regulations.
The U.S. is expected to respond to Canada’s actions, although no official details have been released. President Trump has reportedly threatened to increase tariffs on Canadian vehicles and auto parts to 50%, effective January 1, 2027.
