The Trade War Tit-for-tat Continues: United States Responds To Canada’s Retaliatory Surtaxes With New Tariffs And Import Prohibitions

Key takeaways

• On September 8, in response to Canada’s retaliatory surtaxes which came into effect that day, the United States introduced additional measures on Canadian imports effective September 15 and September 29.
• Additional U.S. measures include increased tariffs on Canadian goods like furniture, machinery and foodstuffs, as well as total import prohibitions on certain goods.
• The situation highlights deteriorating economic relations, with risks for businesses exposed to tariffs on both sides.

After Canada-U.S. trade talks collapsed in late August and President Trump imposed new 50% tariffs on US$20 billion of American imports from Canada, Canada responded with new and increased retaliatory surtaxes — tariffs by another name — on U.S. imports, effective September 8, 2026. Canada’s surtaxes are in addition to or increase existing surtaxes on U.S. steel and aluminum, motor vehicle, and steel derivative goods, imposed in response to previous U.S. tariffs.

On September 8, in a further measure-for-measure response, President Trump signed five proclamations, imposing additional tariffs, modifying the scope of certain existing tariff measures and prohibiting imports in any quantity of certain Canadian goods. This latest development underscores how the two countries’ economic relationship, which for many years was a model for trade liberalization and integration, has deteriorated into a trade war with attendant risks for tariff-exposed businesses.

The Government of Canada’s comprehensive list of all U.S. goods subject to Canadian tariffs, including the latest surtaxes, can be found on its website: complete list of U.S. products subject to counter tariffs. The Canadian government has also provided product sector and administrative policy details for the new surtaxes published: Customs Notice 26-23: United States Surtax Order (2026) and Canadian tariffs on certain US goods: How they apply at the border.

The following tables summarize the tariff landscape for Canada–U.S. trade as of the date of this publication:

Canadian tariffs on U.S. goods

United States tariffs on Canadian goods

Canada’s September 8 retaliatory surtaxes

Canada’s new retaliatory surtaxes cover a broad range of U.S. goods constituting approximately $27.6 billion of U.S. imports. In addition to maintaining the surtax on motor vehicles at 25% and increasing the surtax rates on the vast majority of U.S. steel and aluminum and steel derivative goods to 50%, goods subject to new surtaxes include the following:

• certain softwood and hardwood products (e.g., sawn or chipped wood, plywood, veneered panels, wood pulp, certain paper products including paper and paperboard, boxes, toilet and similar paper): 25% to 50% depending on the good
• certain furniture (e.g., domestic seating, kitchen wooden furniture, plastic furniture): 25% to 50% depending on the good
• certain foodstuffs (e.g., dairy products, fish and seafood products, honey/malt/molasses products): 25% to 50% depending on the good
• certain cosmetics (e.g., skincare products, perfumes): 50%
• certain plastics, plastic goods and polymers (e.g., wall or ceiling coverings, self-adhesive sheets, consumer goods such as tableware): 50%
• certain textiles/textile products (e.g., carpets, clothing): 25% to 50% depending on the good
• certain hand tools and cutlery: 15% to 25% depending on the good
• certain metal mountings and fittings (e.g., for furniture, doors, staircases, windows): 25%
• certain machinery and mechanical appliances (e.g., air/vacuum pumps, air conditioners, refrigerators/freezers, dishwashers, washing machines/dryers, other household appliances, cranes, fork-lift trucks, and parts, harvesting or threshing machinery, hydraulic/pneumatic hand tools): 15% to 50% depending on the good
• certain electrical machinery and equipment (e.g., phone sets, monitors and projectors, and parts): 25% to 50% depending on the good
• certain railway cars and service vehicles and parts: 25%
• certain light fixtures (e.g., LED lighting and parts): 50%
• certain toys and sporting equipment (e.g., golf clubs, exercise equipment, fishing rods and tackle, video game consoles): 50%
• motorcycles: 50%

U.S. section 338 tariffs

The Canadian goods subject to the U.S. section 338 tariffs imposed on August 22, 2026, include the following:

• wood and wood products (e.g., hardwood lumber, fiberboard, MDF, plywood, laminated lumber, veneered panels, chemical woodpulp, densified wood, paper, paperboard, doors and window frames, fencing, retail goods such as sports equipment, kitchen utensils and tableware) excluding softwood lumber and timber, which are subject to section 232 tariffs
• certain machinery and mechanical parts (e.g., hydraulic turbines, air compressors, refrigerating equipment, food processing machinery, a/v equipment)
• certain upholstered and non-upholstered seating
• certain textiles (e.g., yarn, woven polyester fabrics, non-woven man-made materials, knitted fabrics and apparel goods)
• certain plastics and plastic articles (e.g., sheets, rolls, boxes and crates, sacks and bags for packaging)
• certain alcoholic beverages
• certain toys and sporting equipment (e.g., gaming consoles, sporting equipment, exercise equipment and pools)
• art and collectibles
• base and precious metal goods (e.g., tools, jewelry)
• paints, polymer varnishes
• certain cosmetics (e.g., lip and eye make-up and perfumes)
• certain foodstuffs (e.g., dairy, sugars, proteins), live plants and seeds, and animal products

As of September 15, the Canadian goods subject to the U.S. section 338 tariffs also will include the following:

• certain cheeses and cheese substitutes
• certain modified animal, vegetable, or microbial fats and oils
• skins, hides and furskins (tanned and untanned)
• certain motorboats
• certain paper products (e.g., drawing paper, writing paper, paperboard)
• certain iron or steel products
• certain aluminum products and other products of base metals (e.g., aluminum alloy bards and rods, aluminum non-alloyed bars and rods, base metal tubing, base metal hooks, coated base metal wires)
• golf carts and other motor vehicles with cylinder capacities not exceeding 1,000 cc
• certain seats, chairs, and parts of seats
• certain furniture (e.g., bamboo and rattan furniture, furniture made of materials not excluded elsewhere)
• certain mattresses and mattress supports
• certain electric table desks

As of September 15, the following Canadian goods will no longer be subject to the U.S. section 338 tariffs:

• whiskies, liqueurs and cordials in containers over 4 litres
• salt and pure sodium chloride
• Portland cement (other than white cement), whether coloured or not
• chemically pure sugars
• certain toilet or facial tissue for sanitary purposes, and certain bedsheets or household/hospital items of paper
• refined lead (unwrought)
• certain switchgear assemblies
• fishing rod parts and accessories

The August 22, 2026, section 338 tariffs were imposed through three presidential proclamations, purportedly in response to Canada’s retaliatory measures relating to U.S. motor vehicles and alcoholic beverages, which themselves responded to previous U.S. tariffs, and Canadian dairy measures that the United States had litigated, with limited success, under the CUSMA, and are amended by two of the September 8, 2026, presidential proclamations.

The full list of goods subject to the section 338 tariffs until September 15, 2026, can be found in Annex I to each of the proclamations: Motor Vehicles Annex I [PDF], Alcohol Annex I [PDF]and Dairy Annex I [PDF]. As of 12:01 a.m. on September 15, 2026, these lists will be revised per Annexes to the September 8 proclamations: Motor Vehicles Annex I [PDF] and Alcohol Annex I [PDF].

Import prohibitions

As of September 29, the following Canadian goods (which are, or will be as of September 15, subject to 338 tariffs) will be banned for importation into the United States:

• motorcycles
• certain whey products
• molasses
• beer (alcoholic and non-alcoholic)
• certain wine and spirits

These goods are listed in Annexes to two additional proclamations issued on September 8: Dairy Import Prohibition Annex 1[PDF] and Alcohol Import Prohibition Annex 1[PDF].

In addition to the foregoing tariff actions and import bans, President Trump has threatened further trade action against Canada, including to halt government procurement of Canadian-origin products; to raise the tariffs on Canadian motor vehicles and parts to 50% as of January 1, 2027; and a demand that Bombardier “build” aircraft in the United States or be excluded from selling into the U.S. market.