Ottawa unveils calibrated retaliatory tariffs: What Canadian businesses need to know

Updated August 27, 2026 — Revised to reflect the Department of Finance Canada’s updated counter-tariff list published August 26, 2026, replacing the original August 25 list.

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. On August 26, the Department of Finance published a revised counter-tariff list, reducing the number of tariff items from 874 to 629 – primarily by removing all fish and seafood products (HS Ch. 03) – while adding 9 new tariff items covering wood charcoal, printed matter, gypsum board, glass containers and copper wire (all at 50% surtax).

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. Finance Canada’s revision reflects the evolving nature of the trade landscape. The revision underscores that Canada’s retaliatory measures remain subject to ongoing calibration in response to domestic and bilateral developments.

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 list – all at the 50 per cent rate. This reflects Canada’s direct mirroring of U.S. Section 232 steel duties. Other noteworthy sectors include machinery and equipment, dairy, textiles and carpets, aluminum, and tools and cutlery. This ranking is based on the number of tariff items on the counter-tariff list and odes not necessarily reflect the volume or dollar value of affected imports.

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 revised list was announced by the Department of Finance on X on August 26, less than 48 hours after the original list was published. In its post, Finance Canada stated it had made “select adjustments to protect against broader economic harms, including removing seafood and fish products,” while confirming that retaliatory tariffs would continue to target approximately $20 billion in U.S. imports. Canada’s stated overall value of U.S. imports affected – $27.6 billion –has not been updated to reflect the revised list.

Key elements of the announcement include:

• Tariff/surtax rate: 15, 25 and 50 per cent (matched to corresponding U.S. rate)
• Effective date: 12:01 a.m., September 8, 2026
• Value of U.S. imports affected: $27.6 billion
• Number of tariff items: 629 (revised from 874 on August 26)
• Key sectors: Steel and iron, fish and seafood, dairy, machinery and equipment, textiles and carpets, aluminum, tools and cutlery, apparel and clothing, furniture, railway and transport, wood and lumber, pulp and paper, electrical and electronics
• Duration/review: No stated end date; to remain in place as long as U.S. tariffs are in effect or subject to negotiations.
• Other measures announced: $7.5 billion support package for workers and businesses (see below).

List of products from the United States subject to counter-tariffs effective September 8, 2026

What U.S. goods are affected by Canada’s retaliatory tariffs?

As of August 26, Canada’s countermeasures will apply to 629 tariff items across a broad range of products drawn from those targeted by U.S. Section 338 and Section 232 tariffs. The following tables summarize notable products by applicable surtax rate.

Of note, the 50 per cent rate on steel and aluminum products represents an escalation form the existing 25 per cent counter-tariff that Canada has maintained on these goods under its Section 232 retaliatory measures since March 2025. Businesses currently paying the 25 per cent surtax on U.S.-origin steel and aluminum should therefore prepare for a doubling of the applicable rate effective September 8.

Businesses should also note the distinction between primary steel and aluminum products, which are subject to the 50 per cent rate, and steel and aluminum derivative products, which are subject to the 25 per cent rate. Correct tariff classification will be critical in determining which rate applies to a given import.

Goods subject to 50 per cent surtax

Category	HS Chapter(s)	Noteworthy Products	Surtax Rate
Steel and iron	Ch. 72–73	Ingots, flat-rolled products (hot- and cold-rolled), bars, rods, wire, stainless steel, alloy steel, tubes, pipes, structural steel, containers, barbed wire, chain, railway track materials, nails, screws, bolts	50%
Aluminum	Ch. 76	Unwrought aluminum, bars, rods, wire, plates, foil, tubes, structural components, cables, fasteners	50%
Pulp and paper	Ch. 47–48	Chemical wood pulp, kraft paper and paperboard, coated paper, tissue and towel stock, corrugated cartons, envelopes, stationery, tablecloths	50%
Wood and lumber (plywood)	Ch. 44	Plywood, veneered panels, laminated veneer lumber	50%
Dairy	Ch. 04	Milk powder and cream concentrates, whey and whey protein concentrate	50%
Milk protein derivatives	Ch. 35	Casein, milk albumin, milk protein substances	50%
Food preparations	Ch. 19	Bakers' wares mixes and doughs (various formulations)	50%
Cosmetics and personal care	Ch. 33	Perfumes, toilet waters, lip and eye makeup, skin care preparations, manicure/pedicure preparations, hair preparations	50%
Apparel and textiles	Ch. 61–62	Cotton T-shirts, jerseys, pullovers, men's and women's suits, overcoats, jackets, trousers, dresses, gloves, protective garments	50%
Plastics	Ch. 39	Plastic floor and wall coverings, self-adhesive films, plastic tableware and kitchenware, polyethylene bags	50%
Furniture	Ch. 94	Bedroom furniture, wooden domestic furniture, metal furniture, plastic furniture, swivel seats	50%
Sporting and recreational goods	Ch. 95	Video game consoles, golf clubs, gym and exercise equipment, fishing rods	50%
Telecommunications and electronics	Ch. 85	Smartphones, switching and routing apparatus, monitors and projectors	50%
Lighting	Ch. 94	LED chandeliers, ceiling/wall fittings, spotlights	50%
Motorcycles	Ch. 87	Motorcycles with engine capacity exceeding 800 cc	50%
Hand tools	Ch. 82	Pliers, pipe-cutters, hand tools, stapling guns, vices	50%
Wood charcoal (NEW)	HS 44.02	Wood charcoal, whether or not agglomerated	50%
Printed matter (NEW)	HS 49.11	Pictures, designs and photographs	50%
Gypsum/plaster board (NEW)	HS 68.09	Boards, sheets, panels faced or reinforced with paper or paperboard	50%
Glass containers (NEW)	HS 70.10	Bottles, flasks, jars, preserving jars, and other glass containers	50%
Copper wire (NEW)	HS 74.08	Refined copper wire (various cross-sectional dimensions)	50%
Other	Various	Natural honey, molasses, candles	50%

Goods subject to 25% surtax

Category	HS Chapter(s)	Noteworthy Products	Surtax Rate
Cheese and curd	HS 04.06	Fresh, grated, processed, cheddar, mozzarella, parmesan, romano, brie, camembert, gouda, swiss/emmental, gruyère, havarti, provolone, blue-veined, and other cheeses	25%
Major appliances	Ch. 84	Refrigerators, freezers, washing machines, dryers, dishwasher parts	25%
Stoves, ranges, and barbecues	Ch. 73	Non-portable stoves and ranges (gas, liquid, and solid fuel), barbecues, cooking appliance parts	25%
Household goods (iron/steel)	Ch. 73	Cast iron and stainless steel cookware, sanitary ware (sinks, bathtubs), radiators and air heaters	25%
Household goods (aluminum)	Ch. 76	Aluminum kitchen and household articles, sanitary ware	25%
Carpets and textile floor coverings	Ch. 57	Knotted carpets, woven rugs, tufted carpets (wool, nylon, polyamides), felt floor coverings, turf	25%
Paper products	Ch. 48	Toilet paper, paper towels, handkerchiefs	25%
Wood and lumber (sawn)	Ch. 44	Sawn wood — pine, fir, spruce, S-P-F, hem-fir, and other coniferous species	25%
Kitchen furniture	Ch. 94	Wooden kitchen furniture, swivel seats, furniture parts (wood)	25%
Power tools	Ch. 84	Electric saws, chain saws, other hand-held power tools	25%
Railway and transport equipment	Ch. 86–87	Locomotives (electric, diesel-electric), rail coaches, maintenance vehicles, passenger coaches, rolling-stock parts, trailers and semi-trailers	25%
Electronics and parts	Ch. 85	Printed circuit assemblies, parts for TV receivers, insulated wire and cable, transceiver assemblies	25%
Air conditioning (non-refrigerating)	HS 84.15	Non-refrigerating AC units	25%
Cutlery and knives	Ch. 82	Table cutlery, knives with cutting blades, sets of assorted articles, spoons, forks, ladles	25%
Base metal mountings and fittings	Ch. 83	Hinges, furniture fittings, door/window mountings	25%
Pumps and compressors	Ch. 84	Pump parts, turbochargers, air/gas compressors, fans	25%
Cranes and hoists	Ch. 84	Tower cranes, hydraulic jacks and hoists	25%
Domestic electro-mechanical appliances	Ch. 85	Ultrasonic vaporizers, other domestic appliances, electric ovens, cooking stoves and ranges	25%
Lawn mowers	Ch. 84	Powered rotary mowers for lawns, parks, and sports-grounds	25%
Drying machines	Ch. 84	Commercial and household drying machines	25%
Containers	Ch. 86	Reusable containers for motor vehicle component transport	25%

Goods subject to 15% surtax

Category	HS Chapter(s)	Noteworthy Products	Surtax Rate
Fork-lift trucks and material handling	HS 84.27	Electric and self-propelled rider-type counterbalanced fork-lifts	15%
Lifting, handling, and loading machinery	HS 84.28	Teleferics, chair-lifts, ski-draglines, industrial robots, conveyors, other lifting/handling machinery	15%
Agricultural machinery parts	HS 84.31, 84.33	Mower cutter bars for tractor mounting, harvesting machinery parts, bulldozer and angledozer blades, buckets, shovels, grabs	15%
Machine-tools	HS 82.07	Dies for drawing or extruding metal, tools for pressing, stamping, or punching	15%
Moulds	HS 84.80	Injection or compression moulds for rubber or plastics, moulds for metal	15%
Air conditioning (certain units and parts)	HS 84.15	Window/wall/ceiling/floor-mounted units, reversible heat pumps (single-packaged or split-system), domestic heat pump ductless split-systems, chassis, chassis bases, outer cabinets	15%

Exemptions and carve-outs

Exemption/Carve-Out	Details
U.S.-origin only	Tariffs apply only to goods originating from the United States under the CUSMA Marking Regulations. Third-country goods are not affected, even if shipped through the U.S.
In-transit protection	Countermeasures do not apply to U.S. goods already in transit to Canada on September 8, 2026.
No CUSMA exemption	There is no carve-out for CUSMA-compliant goods. Tariffs apply regardless of CUSMA origin.
Remission framework	No pre-implementation exemption, but post-implementation remission requests may be considered where goods cannot be sourced domestically or from non-U.S. sources, or where exceptional circumstances would cause severe adverse impacts on the Canadian economy.
Notable absences	Oil, gas, and potash are not on the list. Motor vehicles and auto parts are subject to separate counter-tariff orders. Fish and seafood (HS Ch. 03, 254 tariff items) has been removed from the revised August 26 list.

What changed between the August 25 and August 26 lists?

The notable changes on Canada’s revised counter-tariffs list include the following:

254 fish and seafood tariff items removed. The entire fish and seafood category (HS Ch. 03), which on the original list was the second-largest category representing nearly a third of all tariff lines – uniformly at 25 per cent – has been removed. The revised list no longer includes any items under HS 03.01 through 03.09. The immediate removal may reflect a desire to shield Canada's commercially significant fishing sector from the risk of further U.S. retaliatory escalation, given the significance of the U.S. market for Canadian seafood exports.

9 tariff items added. The revised list adds certain wood, charcoal, printed matter, gypsum board, glass containers, and copper wire, all at the 50 per cent surtax rate:

Tariff Item	HS Heading	Indicative Description	Surtax Rate
4402.90.10	Wood charcoal	Wood charcoal (not including shell or nut charcoal), containing 10% or less by weight of binder	50%
4402.90.90	Wood charcoal	Other wood charcoal	50%
4911.91.00	Printed matter	Pictures, designs and photographs	50%
6809.11.00	Articles of plaster	Boards, sheets, panels, tiles – faced or reinforced with paper or paperboard only	50%
7010.90.00	Glass containers	Carboys, bottles, flasks, jars, pots, phials, ampoules and other containers, of glass – other	50%
7408.11.10	Copper wire	Refined copper wire, cross-sectional dimension exceeding 6 mm: not exceeding 9.5 mm	50%
7408.11.20	Copper wire	Refined copper wire, cross-sectional dimension exceeding 6 mm: exceeding 9.5 mm but not exceeding 12.7 mm	50%
7408.11.30	Copper wire	Refined copper wire, cross-sectional dimension exceeding 6 mm: exceeding 12.7 mm	50%
7408.19.00	Copper wire	Refined copper wire: other	50%

When do Canada’s retaliatory tariffs take effect?

Of particular importance for importers is the treatment of goods already in transit. Consistent with the 2018 and 2025 precedents, Canada’s countermeasures will not apply to U.S. goods that are already in transit to Canada on the day the tariffs come into force. Importers should document shipment dates and transit status carefully, given the narrow window before September 8.

What do the retaliatory tariffs mean for Canadian businesses?

The immediate impact will vary considerably depending on a business's exposure to U.S.-origin goods, its supply chain and its ability to absorb, pass through or mitigate additional costs. For some businesses, the tariffs could increase landed costs for U.S. imports and affect existing pricing and contractual arrangements. Others may need to consider alternative suppliers or sourcing markets.

How is U.S.-origin determined?

The surtaxes apply to goods that are products of the United States, as determined under the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations (SOR/94-23) (“The CUSMA Marking Regulations”).

These marking rules are not the same as the CUSMA preferential rules of origin used to determine whether goods qualify for duty-free treatment under CUSMA. They are a different and generally less stringent test, and a determination under one set of rules does not necessarily produce the same result under the other.

In general, it is easier for a good to be considered a U.S. origin product under the marking rules, such that more goods are captured than anticipated. Businesses should review the U.S. and foreign content in their imported products to assess whether each product is a product of the United States under the marking rules.

Can Canadian businesses seek tariff relief or remission?

The Government of Canada has not announced a specific pre-implementation exemption framework for the new counter-tariffs. However, based on the 2025 precedent, a post-implementation remission framework is expected. Under section 115 of the Customs Tariff, the Governor in Council may, on the recommendation of the Minister of Finance or the Minister of Public Safety and Emergency Preparedness, remit duties.

Ottawa has indicated it will consider remission requests where goods used as inputs cannot be sourced domestically or from non-U.S. sources, or where other exceptional circumstances could have severe adverse impacts on the Canadian economy. The existing remission request process remains available through the Department of Finance. Businesses should begin gathering the supporting documentation that will be required, including tariff classifications, import volumes and values, sourcing alternatives, and cost impact analyses.

What should Canadian businesses do now?

Businesses that import goods from the United States should consider several immediate steps:

• Review tariff classifications: Conduct a line-by-line review of imported products against the government's published tariff list rather than relying solely on general product descriptions.
• Assess U.S.-origin status: Review the U.S. and foreign content in imported products to determine whether each product qualifies as a product of the United States under the CUSMA marking regulations, distinct from the CUSMA preferential rules of origin. In general, it is easier for a good to be considered a U.S. origin product under the marking rules, such that more goods are captured than anticipated.
• Assess shipments already underway: Determine whether goods currently in transit qualify for transitional treatment and ensure appropriate documentation of shipment and entry dates is maintained.
• Model the cost impact: Assess the effect of the surtax on landed costs, pricing, margins and existing commercial arrangements.
• Review contracts: Consider which party bears responsibility for tariffs under existing agreements and whether tariff-related adjustment or other contractual provisions may apply.
• Consider alternative sourcing: Where exposure is significant, businesses may want to assess whether comparable products can be sourced domestically or from other markets.
• Prepare for potential remission opportunities: Businesses facing significant or unintended impacts should begin gathering information that may be required to support a remission request.

Alongside the counter-tariffs, the Government of Canada announced a $7.5 billion package of new and enhanced support measures for Canadian workers and businesses, building on the nearly $25 billion in supports already provided since U.S. tariffs were first imposed. Affected businesses should assess their eligibility for these programs.

Gowling WLG’s International Trade & Customs team continues to monitor these developments closely. We are ready to assist businesses in assessing tariff exposure, reviewing classifications and supply chains, evaluating available relief and remission mechanisms, and navigating the broader implications of the evolving Canada-U.S. trade relationship. Contact one of the authors to begin a conversation.