Canada–U.S. Trade & Tariffs

Section 232 of the U.S. Trade Expansion Act of 1962 permits import restrictions when the United States determines that imports threaten national security. The measures are often called sectoral tariffs because they focus on particular industries and product groups.

Current measures affect steel, aluminum and copper; autos, trucks and certain parts; buses; softwood timber and lumber; certain upholstered furniture and kitchen cabinets and vanities; certain semiconductors; and patented pharmaceuticals and associated ingredients. Rates range from product-specific exemptions or reduced treatment to 100 per cent. The pharmaceutical measure is scheduled to expand to companies not listed in Annex III on September 29, 2026. Verify each shipment using current official guidance.

Section 301 of the U.S. Trade Act of 1974 allows the United States to investigate and respond to foreign-government practices it considers unreasonable, discriminatory or harmful to U.S. commerce.

The current measure affecting Canada follows a U.S. investigation into the enforcement of prohibitions on imports produced with forced labour. Canada is subject to a 10 per cent tariff under the measure, while CUSMA-compliant goods and certain other products are exempt.

Section 338 of the U.S. Tariff Act of 1930 authorizes the U.S. president to impose additional duties of up to 50 per cent in response to trade practices considered discriminatory or disadvantageous to U.S. commerce.

The United States invoked Section 338 against Canada in 2026. A 50 per cent tariff took effect August 22 on $27.6 billion in Canadian goods. This measure is separate from the sector-specific Section 232 tariffs and the Section 301 measure.

Canada has imposed counter-tariffs on selected U.S. products in response to U.S. trade measures. Existing Canadian countermeasures remain in place for certain goods, including measures affecting steel, aluminum and automobiles.

Canada announced additional tariffs of 15, 25 and 50 per cent on $27.6 billion in U.S. imports, effective September 8, 2026. The rate for each listed product matches the corresponding U.S. tariff.

The Canada–United States–Mexico Agreement governs much of the trade among the three countries. Goods that meet its rules of origin can qualify for preferential tariff treatment.

CUSMA compliance can determine whether some U.S. tariffs apply, but it is not a blanket exemption. For example, CUSMA-compliant goods may still be subject to Section 232 sectoral tariffs or another product-specific measure.

Canadian businesses paying counter-tariffs on goods imported from the United States may request exceptional relief through the federal remission process.

Relief may be considered when necessary goods or suitable substitutes cannot reasonably be sourced from Canada or a non-U.S. supplier, or when tariffs create exceptional circumstances with potentially severe economic effects. Applications are assessed individually and require detailed evidence.

The Canada Border Services Agency’s Duties Relief Program can allow qualifying businesses to import commercial goods without paying applicable duties when those goods will later be exported, either unchanged or after manufacturing or processing.

The program can reduce the cash-flow burden for businesses that import inputs used to produce exported goods. Participation requires an application and records that demonstrate eligible export use.

Duty drawback may refund eligible duties already paid on imported commercial goods that are later exported directly or used to produce exported goods.

In simple terms, Duties Relief can prevent qualifying duties at import, while drawback can recover qualifying duties after payment. Documentation and timing requirements apply.

BDC offers financing and advice for Canadian companies adapting to tariffs and economic uncertainty. Support may help preserve cash flow, manage increased costs, adjust supply chains, improve productivity or invest in equipment and market diversification.

BDC’s Pivot to Grow program offers financing of up to $5 million for eligible businesses. The federal government announced additional tariff-response funding and broader access on August 25, 2026; applicants should review current criteria.

EDC’s Trade Impact Program expands financing and risk-management capacity for exporters, companies that supply exporters and other Canadian businesses facing trade uncertainty.

Available tools can include working-capital financing, trade credit insurance, guarantees, foreign-exchange solutions, extended financing terms and market-diversification support.

The Regional Tariff Response Initiative provides support for small and medium-sized businesses affected by tariffs and trade disruption. FedDev Ontario delivers the program in southern Ontario, including Burlington.

Funding can help eligible businesses improve productivity, reduce costs, strengthen supply chains, adopt technology and equipment, and enter or expand into new markets. Review current business-size, employment, location and tariff-exposure requirements.

Ontario’s Protect Ontario Financing Program offers working-capital loans to eligible Ontario businesses experiencing significant financial pressure because of U.S. tariffs. Funds may support operating costs such as payroll, leases and utilities rather than capital projects.

The program has included businesses affected directly or indirectly by tariffs in steel, aluminum, copper and automotive manufacturing, and Ontario announced expanded eligibility for businesses affected by Section 338 measures. Check the current revenue, employment, operating-history and exposure criteria.

The Government of Canada has introduced a broader mix of financing, investment, business and workforce measures in response to U.S. tariffs.

A $7.5 billion package announced August 25, 2026 includes additional Regional Tariff Response Initiative funding, a new BDC liquidity stream, the Canada Strong Diversification Fund, rapid-response worker and employer supports, and changes to large-enterprise tariff financing. Implementation details may continue to evolve.