Canada-U.S. Trade War Briefing: Ottawa Expands Supports as September Counter-Tariffs Are Finalized

Week of August 24 to 31, 2026

The Huron Chamber of Commerce publishes this weekly briefing to keep members informed of substantive developments in Canada’s trade dispute with the United States, including changes to tariffs, government programs, official announcements and economic data that may affect local businesses.

Canada’s response to the latest escalation in the trade dispute with the United States took clearer shape over the past week, with the federal government finalizing its next round of counter-tariffs and announcing a significant expansion of financial and employment supports for businesses and workers.

The developments follow the implementation on August 22 of new U.S. Section 338 tariffs of up to 50 per cent on $27.6 billion in Canadian goods. Canada-U.S. trade negotiations remain suspended after the federal government concluded that the latest U.S. proposal did not provide sufficient tariff relief and would impose unacceptable conditions on Canada. hcoc.ca/news-31814

Canada finalizes $27.6 billion in September 8 counter-tariffs

On August 25, Finance Minister François-Philippe Champagne confirmed that Canada will match the latest U.S. tariffs dollar-for-dollar and rate-for-rate.

Beginning at 12:01 a.m. on September 8, Canadian counter-tariffs of 15, 25 and 50 per cent will apply to selected U.S.-origin products. The measures cover approximately $27.6 billion in imports and include products in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, electronics, furniture and consumer goods. Existing Canadian counter-tariffs, including measures affecting vehicles, remain in place. hcoc.ca/news-31814

The detailed tariff-item list was subsequently updated by the Department of Finance on August 26. Businesses importing U.S. goods should work from the current list rather than earlier summaries of the proposed measures, as the tariff-item-level schedule is the controlling reference. Goods already in transit to Canada when the measures take effect will not be subject to the new surtaxes. hcoc.ca/news-31827

The Huron Chamber has also updated its September 8 Counter-Tariff Guide to reflect the latest federal list: hcoc.ca/us-trade-war

Ottawa adds $7.5 billion in new and expanded tariff supports

The counter-tariff announcement was accompanied by a $7.5 billion package of new and expanded supports for businesses and workers affected by the dispute.

For small and medium-sized businesses, one of the most significant changes is an additional $1.5 billion for the Regional Tariff Response Initiative, which is delivered in southern Ontario through FedDev Ontario. Beginning in September, the maximum non-repayable contribution is being increased from $1 million to $3 million, and the program is being expanded to address demonstrated liquidity needs. Liquidity assistance of up to $2 million will be available in addition to support for investments intended to improve productivity, strengthen supply chains or help businesses enter new markets. hcoc.ca/news-31842

The federal package also includes a new $500 million liquidity stream through the Business Development Bank of Canada’s Pivot to Grow program. Ottawa is lowering the minimum revenue threshold for BDC tariff-related programs to $1 million, making the programs accessible to a larger number of smaller businesses.

A further $2 billion will go to a new Canada Strong Diversification Fund for tariff-affected businesses with investment-ready projects, while $3.5 billion has been allocated to a new package of worker and employer supports. These include temporary Employment Insurance flexibilities, workplace training and a Worker Retention and Retraining Program intended to help employers keep workers during periods of reduced activity. The Large Enterprise Tariff Loan facility is also being made more flexible. hcoc.ca/news-31814

FedDev Ontario continues to accept applications under the existing Regional Tariff Response Initiative. The agency says additional details on the expanded September support will be released as implementation proceeds. hcoc.ca/news-31842

EDC expands Trade Impact Program

Export Development Canada announced another change on August 27, expanding its Trade Impact Program to reach more companies affected by tariffs.

EDC says it will increase its risk tolerance under the program, particularly for small and medium-sized companies facing new U.S. tariff exposure. The revised program includes a $700 million direct-financing envelope with flexible terms intended to complement financing provided by commercial financial institutions. The changes take effect September 1. hcoc.ca/news-31856

The Trade Impact Program was originally launched in March 2025 with up to $5 billion in additional financing and insurance capacity. EDC reports that approximately $3 billion has now been deployed through more than 6,000 transactions supporting more than 800 Canadian companies. Steel, aluminum, automotive and agri-food businesses are among the sectors receiving particular attention.

For affected businesses, EDC assistance can include working-capital support, financing for equipment and productivity investments, trade credit insurance, support for market diversification and guarantees that can reduce the amount of cash or credit tied up in contracts.

Statistics Canada: tariff costs continue to reach beyond exporters

New Statistics Canada data released August 31 provide another indication that tariff costs are spreading through the broader economy.

In the third-quarter Canadian Survey on Business Conditions, 32.2 per cent of Canadian businesses said they expect U.S. tariffs on Canadian goods to negatively affect their business over the next 12 months. The proportion was substantially higher in manufacturing, at 49.7 per cent, transportation and warehousing at 47.3 per cent, and wholesale trade at 45.1 per cent.

More than one-quarter of businesses, 27.4 per cent, reported that they had already passed tariff-related cost increases on to customers during the previous 12 months. Looking ahead, 30.4 per cent said they were very or somewhat likely to pass additional tariff costs on to customers over the coming year. hcoc.ca/news-31863

There were also some signs of successful market diversification in Statistics Canada’s second-quarter corporate data released August 24. Operating profits in primary metal, fabricated metal and machinery manufacturing increased 6.1 per cent despite continuing U.S. tariff pressure. Statistics Canada reported that aluminum producers were a major contributor to the increase, with exports of unwrought aluminum to destinations outside the United States nearly doubling during the quarter. Total unwrought aluminum exports increased 15.2 per cent. hcoc.ca/news-31871

The broader Canadian economy also performed better in the second quarter. Real GDP increased 0.8 per cent, led by exports, household spending and business investment. Export volumes increased 3.7 per cent during the quarter while imports rose 0.3 per cent. hcoc.ca/news-31884

Those national numbers suggest that the economy continues to absorb the trade disruption, but the business survey results show that the effects remain concentrated in sectors with greater exposure to cross-border trade and tariff-sensitive supply chains.

What businesses should watch

The immediate date to watch is September 8, when Canada’s new counter-tariffs come into force. Importers should review the updated tariff-item list against their HS classifications and confirm the country of origin of affected goods.

Businesses facing cash-flow pressure, lost U.S. sales, supply-chain disruption or the need to invest in new markets should also review the expanded FedDev Ontario, BDC and EDC programs. Several of the newly announced measures begin changing in September, and further program details are expected as the federal agencies implement the additional funding.

The Huron Chamber will continue to monitor tariff changes, government relief programs and economic data as the dispute develops. Businesses can follow the Chamber’s U.S. Trade War Hub for updated tariff guides, resources and news: hcoc.ca/us-trade-war

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