Canada-U.S. Trade & Tariffs

Section 232 Tariffs

Section 232 of the U.S. Trade Expansion Act of 1962 allows the United States to restrict imports when they are determined to threaten U.S. national security. These measures are commonly referred to as sectoral tariffs because they apply to specific industries and product groups.

Section 232 tariffs currently affect Canadian exports in sectors including steel, aluminum, copper, automobiles and trucks and their parts, buses, softwood timber and lumber, certain furniture and cabinetry, semiconductors, patented pharmaceuticals and associated pharmaceutical ingredients, and unmanned aircraft systems. Tariff rates, exemptions and treatment vary considerably by sector and product.

Effective September 29, 2026, the U.S. Section 232 measure on patented pharmaceuticals expanded to covered patented pharmaceuticals and associated pharmaceutical ingredients imported by companies not covered by specified exemptions or agreements. The standard tariff under the measure is 100 per cent. Generic pharmaceuticals and their associated ingredients remain exempt. CUSMA compliance does not provide a general exemption from Section 232 tariffs.

Section 301 Tariffs

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 Section 301 measure affecting Canada stems from a U.S. investigation into how trading partners prohibit and enforce restrictions on imports produced with forced labour. Canada is subject to a 10 per cent tariff under the measure, with CUSMA-compliant goods and certain other products exempt.

Section 338 Tariffs and Import Prohibitions

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

The United States invoked Section 338 against Canada in 2026, with 50 per cent tariffs taking effect August 22 on a broad range of Canadian goods. Effective September 15, the United States revised the products covered by the tariffs, removing certain goods, including cement and salt, while adding others, including additional dairy products, paper products, iron and steel structural components and other manufactured goods. Section 338 tariffs apply to covered goods regardless of whether they qualify for preferential treatment under CUSMA and, where applicable, are imposed in addition to Section 232 tariffs.

Effective September 29, 2026, the United States prohibits the importation of specified Canadian products that had previously been subject to the 50 per cent Section 338 tariff. The prohibitions cover specified alcoholic beverages, dairy ingredients and whey products, molasses and certain sugar-processing products, non-alcoholic beer, and motorcycles. These measures are import prohibitions rather than additional tariffs. Other products remaining within the Section 338 scope continue to be subject to the 50 per cent tariff.

Businesses exporting affected products should confirm the current treatment of their specific goods using the applicable U.S. tariff classification and the latest Section 338 product lists.

U.S. Federal Procurement Restrictions

On September 16, 2026, the U.S. administration directed federal officials to identify Canadian-origin goods in the U.S. federal civil procurement system that may, where warranted and permitted by law, be removed or made unavailable for purchase. Federal agencies were also directed to consider domestic alternatives to Canadian-origin products.

The memorandum does not itself impose a blanket prohibition on Canadian goods or suppliers. Its practical effect will depend on implementation by U.S. federal agencies and procurement authorities. Canadian businesses selling to U.S. federal customers should monitor individual procurement requirements and agency guidance for changes affecting their products.

Canadian Counter-Tariffs

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

On September 8, 2026, additional Canadian counter-tariffs took effect on $27.6 billion in U.S. imports. The measures apply tariffs of 15, 25 or 50 per cent to selected products, with rates generally based on the corresponding U.S. tariff applied to affected Canadian goods. Products covered include goods in sectors such as steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics. In some cases, including certain steel and aluminum products, existing Canadian tariffs increased from 25 per cent to 50 per cent.

The September 8 product list was revised before the tariffs took effect, including the removal of Chapter 3 fish and seafood products from the new measures and changes to other tariff items. Businesses should use the Government of Canada's current consolidated list to determine whether a specific U.S. product is subject to a counter-tariff and at what rate. The new tariffs apply only to goods considered to originate in the United States under Canada's applicable country-of-origin rules.

The Huron Chamber's Consolidated Canada-U.S. Trade War and Tariff Guide also includes the current Canadian counter-tariff measures alongside the major U.S. tariffs affecting Canadian goods.

CUSMA

The Canada-United States-Mexico Agreement, or CUSMA, governs much of the trade among Canada, the United States and Mexico. Goods that meet CUSMA rules of origin can qualify for preferential tariff treatment.

CUSMA compliance has become particularly important during the current trade dispute because it can determine whether some U.S. tariffs apply to Canadian goods. It does not, however, provide a blanket exemption from all U.S. tariffs. In particular, CUSMA-compliant goods can still be subject to Section 232 sectoral tariffs and Section 338 tariffs.

Tariff Remission

Canadian businesses facing counter-tariffs on goods imported from the United States can request exceptional relief from those tariffs through the federal tariff remission process.

Remission may be considered where necessary goods or suitable substitutes cannot reasonably be sourced from Canada or from non-U.S. suppliers, or where tariffs create exceptional circumstances with potentially severe adverse economic effects. Applications are considered individually and require businesses to provide detailed information about their sourcing, costs, operations and the expected consequences of the tariff.

Government of Canada: Process for Requesting Remission of Tariffs on Certain U.S. Goods →

Duties Relief Program

The Canada Border Services Agency's Duties Relief Program allows qualifying businesses to import commercial goods without paying applicable duties when those goods will later be exported, either in the same condition or after being used in manufacturing or processing.

For businesses that import U.S. inputs to manufacture goods for export, the program can avoid the cash-flow cost of paying duties and subsequently seeking a refund. Businesses must apply to participate in the program and maintain records demonstrating that the imported goods ultimately qualify for export treatment.

Official information: Canada Border Services Agency, Duties Relief Program →

Duty Drawback Program

The Duty Drawback Program serves a similar purpose to Duties Relief, but applies when duties have already been paid. Qualifying businesses can apply for a refund of duties paid on imported commercial goods that are later exported, either directly or after being used in the production of exported goods.

In practical terms, Duties Relief can allow qualifying businesses to avoid paying duties at the time of import, while Drawback provides a mechanism to recover qualifying duties after they have been paid.

Official information: Canada Border Services Agency, Drawback Program →

Business Development Bank of Canada

BDC offers financing and advisory support to help Canadian businesses manage tariff-related cash-flow pressure, absorb increased costs, adjust supply chains, invest in productivity and adapt to changing trade conditions.

BDC's expanded Pivot to Grow program includes a liquidity stream providing eligible businesses with loans from $250,000 to $5 million. The liquidity loans offer 0% interest for the first 12 months, interest-only payments for up to 36 months and amortization over up to 96 months. The program is available until March 31, 2028.

General eligibility requirements include being based in Canada, having at least $1 million in annual revenue, at least three years in business and a history of positive cash flow. For the liquidity stream, at least 15% of sales must come from exports to the United States and tariff costs must equal at least 5% of company revenue. Separate Pivot to Grow working-capital and equipment financing may also be available to businesses significantly affected by U.S. tariffs or related trade disruption.

BDC is also offering a six-month principal-payment deferral to eligible existing exporting clients affected by the latest tariffs, along with targeted programs for the steel, aluminum and forestry sectors.

Export Development Canada

Export Development Canada's Trade Impact Program provides additional financing, insurance and risk-management capacity for Canadian exporters and other businesses affected by tariffs and changing global trade conditions.

Effective September 1, 2026, EDC expanded the program to support a broader range of businesses, including more small and medium-sized exporters affected by U.S. tariffs. EDC is taking on additional risk and has established a $700 million direct-financing envelope with flexible terms designed to complement financing available through businesses' financial institutions.

Support can include working-capital financing, guarantees, trade credit insurance, direct financing and other tools to help businesses protect cash flow, strengthen supply chains, invest in productivity and diversify into new international markets.

EDC: Trade Impact Program and Tariff Support for Canadian Companies →

Regional Tariff Response Initiative

The Regional Tariff Response Initiative provides funding to small and medium-sized businesses affected by tariffs and trade disruption. In southern Ontario, including Huron County, the program is delivered by the Federal Economic Development Agency for Southern Ontario, FedDev Ontario.

Applications are now open for the enhanced program. Tariff-affected businesses across all sectors with at least $1 million in annual revenue may be eligible for non-repayable liquidity assistance of up to $2 million. Liquidity support is normally based on up to 50% of eligible costs for a period of up to 12 months and is intended to help businesses maintain Canadian operations and employment while managing tariff-related cash-flow pressures.

Businesses can also apply for Pivot Project funding for investments that improve productivity, adopt technology, strengthen supply chains, diversify markets or otherwise reduce exposure to trade disruption. Non-repayable Pivot Project funding is available up to $1 million, normally covering up to 50% of eligible costs. Larger transformative projects can receive repayable funding of more than $1 million, normally covering up to 75% of eligible costs.

A business can receive up to $3 million in combined non-repayable support, consisting of up to $2 million in liquidity assistance and up to $1 million for a non-repayable Pivot Project. When repayable support is included, total RTRI funding can reach $20 million. Businesses may apply for liquidity assistance, a Pivot Project, or both.

FedDev Ontario: Regional Tariff Response Initiative in Southern Ontario →

Protect Ontario Financing Program

Ontario's Protect Ontario Financing Program provides working-capital loans to eligible Ontario businesses experiencing significant financial pressure because of U.S. tariffs and trade restrictions. Funding can support operating expenses such as payroll, lease payments and utilities rather than capital projects.

Eligibility includes businesses directly exporting, or participating in the supply chain of sectors affected by, Section 232 and Section 338 tariffs. Effective September 15, Ontario expanded eligibility to businesses affected by the latest U.S. Section 338 tariff additions, including certain steel, aluminum and other metal products, mattresses, furniture, paper products, motorboats, golf carts, certain dairy and specialty cheese products, and selected animal-skin and leather products.

Effective September 29, eligibility was further expanded to businesses affected by U.S. import prohibitions on most Canadian alcoholic beverages, including beer, wine, cider, spirits and other liquor products; certain dairy-related products, including whey products; and motorcycles with engine capacities exceeding 800 cc.

Businesses generally must have at least $2 million in annual revenue, at least 10 full-time employees in Ontario and at least three years of operations and financial statements. Applicants must demonstrate a material tariff- or trade-related working-capital challenge and must have explored federal financial-support options and either exhausted them or encountered significant barriers to accessing them.

Businesses seeking support must require at least $250,000 in liquidity funding. The province uses an initial eligibility screening process before inviting qualifying businesses to proceed to the next stage.

Government of Ontario: Protect Ontario Financing Program →

Ontario Together Trade Fund

The Ontario Together Trade Fund supports Ontario businesses making near-term investments to respond to U.S. trade disruption, strengthen domestic supply chains, increase competitiveness and develop new markets, with particular emphasis on expanding interprovincial trade.

Eligible businesses generally must operate in Ontario, have at least three years of operations and financial statements and employ at least five full-time equivalent employees. Businesses must also demonstrate significant exposure to U.S. tariffs or trade disruption, or be making an investment that responds to supply-chain changes created by the tariffs.

Effective September 15, Ontario expanded eligibility to businesses affected by the latest U.S. Section 338 tariff additions, including certain metal products, mattresses, furniture, paper products, motorboats, golf carts, certain dairy and specialty cheese products, and selected animal-skin and leather products. Effective September 29, eligibility was further expanded to businesses affected by U.S. import prohibitions on most Canadian alcoholic beverages, certain dairy-related products, including whey products, and motorcycles with engine capacities exceeding 800 cc.

For most eligible businesses, support is generally structured as grants or loans equal to 10% to 20% of eligible project costs, to a maximum of $5 million. Eligible projects can include market development, investments in advanced technology and processes, increased manufacturing capacity, and projects that create or protect Ontario jobs.

Government of Ontario: Ontario Together Trade Fund →

Canada Strong Diversification Fund

The federal Canada Strong Diversification Fund, delivered through the Strategic Response Fund, provides support to Canadian businesses facing significant impacts from U.S. tariffs. The fund includes support for projects that help companies adapt, pivot and diversify, as well as a capital-maintenance stream intended to help tariff-affected businesses maintain operations and productive capacity.

The adaptation and diversification stream focuses primarily on large-scale projects that support domestic production, new products and technologies, alternative markets, productivity and long-term competitiveness. The fund generally focuses on projects with more than $20 million in eligible project costs and requests for federal contributions of $10 million or more.

The capital-maintenance stream provides non-repayable funding for up to two years to businesses directly or indirectly affected by U.S. Section 338 tariffs. Applicants generally must have at least 10 full-time equivalent employees, $20 million in annual revenue and average annual capital expenditures of at least $5 million over the previous three fiscal years. Funding requests must be between $5 million and $30 million.

Applications are being accepted on a continuous basis until available funding is fully committed.

Government of Canada: Canada Strong Diversification Fund, Eligibility and Application →

Other Federal Tariff Response Supports

The Government of Canada has introduced a broader package of financing, investment, business-support and workforce measures in response to U.S. tariffs and trade disruption.

The $7.5 billion tariff-response package announced on August 25, 2026 includes the expanded BDC and Regional Tariff Response Initiative programs outlined above, the $2 billion Canada Strong Diversification Fund, new flexibilities under the Large Enterprise Tariff Loan facility and $3.5 billion in Rapid Response Supports for Workers and Employers.

The federal government has also announced a new Workforce Retention and Retraining Program to help businesses retain and retrain employees who temporarily reduce their working hours. Once launched, participating employers will be able to receive up to $1,000 per employee for training costs, while eligible workers will be able to receive support equal to a total of 70% of lost earnings for time not worked. The program is still listed by the federal government as coming soon. In the meantime, the existing Work-Sharing Program and Worker Retention Grant continue to operate, with special tariff-related Work-Sharing measures extended to March 31, 2028.

Large Canadian enterprises affected by tariffs can also review the Large Enterprise Tariff Loan facility, which provides financing to qualifying large businesses facing significant tariff-related pressures.