The next phase of the Canada-U.S. tariff dispute has arrived.
On August 25, Canada announced calibrated retaliatory tariffs on approximately $27.6 billion of U.S. imports, responding to the 50 per cent Section 338 tariffs imposed by the United States on more than 550 categories of Canadian goods. The measures put detail behind Canada’s previously announced retaliatory response, which is set to take effect on September 8.
For Canadian businesses, the implications extend well beyond the tariff rate itself. Which products are caught, the impact of the timing of entry into Canada, how contracts allocate unanticipated liability, where products and their components are sourced, and whether relief is available could all materially affect the impact.
Against this backdrop, we examine the key questions arising from Canada’s retaliatory tariffs, including which goods are affected, the implications for Canadian businesses and the practical measures businesses should consider now.
What retaliatory tariffs has Canada announced?
Canada will impose surtaxes of 15, 25, and 50 per cent on 874 tariff items covering $27.6 billion of U.S.-origin goods, effective 12:01 a.m., September 8, 2026. The rates are matched dollar-for-dollar and rate-for-rate to the corresponding U.S. Section 338 and Section 232 tariff rates.
Iron and steel is the most heavily targeted sector, accounting for approximately 31 per cent of the entire counter-tariff list—all at the 50 per cent rate. This reflects Canada’s direct mirroring of U.S. Section 232 steel duties. Fish and seafood is the second-largest category, representing nearly a third of all tariff lines, uniformly at 25 per cent. Other noteworthy sectors include dairy (5.8 per cent of items), machinery and equipment (5.7 per cent), textiles and carpets (3.7 per cent), aluminum (3.3 per cent) and tools and cutlery (3.3 per cent).
The stated objective of the countermeasures is to protect Canadian workers, producers and manufacturers harmed by U.S. tariffs by improving their competitive standing against U.S. products in the Canadian market. The product selection also may be of political significance in advance of the November 2026 midterm elections. In remarks accompanying the August 25 announcement, the government indicated that nearly $3 billion worth of imports from Ohio are exposed to Canada’s countermeasures, representing 12 per cent of total Canadian imports from the state—a state with two competitive House races. The government further noted that approximately 33 per cent of Canada’s imports from Maine, a closely watched Senate battleground, are now subject to the new counter-tariffs.
Key elements of the announcement include:
