Trade & Tariffs: U.S.-Canada Tariff Dispute Expands
U.S.-Canada Tariff Dispute Expands
New Canadian retaliatory tariffs and changes to U.S. Section 338 measures are adding another layer of complexity for manufacturers with cross-border supply chains.
Tariff tensions between the United States and Canada escalated in September as Canadian retaliatory tariffs took effect and the White House expanded its response under Section 338 of the Tariff Act of 1930.
What You Need to Know
Beginning September 8, Canada imposed tariffs of 15 percent, 25 percent or 50 percent on a broad range of U.S.-origin goods, including manufactured products and industrial inputs.
On September 8, the White House issued five proclamations modifying U.S. Section 338 measures first announced in July.
Additional U.S. import prohibitions covering certain Canadian goods are scheduled to take effect September 29.
Canada Broadens Its Counter-Tariffs
Beginning September 8, 2026, Canada imposed tariffs of 15 percent, 25 percent or 50 percent on approximately $20 billion in U.S.-origin goods. The covered products include a broad range of manufactured goods and industrial inputs.
• Molds for metal, rubber and plastics
• Aluminum structures and articles
• Pumps and compressors
• Agricultural machinery
• Other industrial equipment
Goods that were already in transit when the tariffs took effect are generally exempt, though the tariffs do apply to USMCA qualifying goods.
U.S. Section 338 Measures Change
In response, on September 8, the White House issued five proclamations modifying the U.S. Section 338 measures first announced in July and which took effect August 22.
The changes removed certain products, including cement and rock salt, from the existing 50 percent tariffs on Canada and substituted other imports, including all-terrain vehicles and additional dairy products. The additions and removals took effect September 15.
The administration also announced import prohibitions covering certain Canadian alcoholic beverages, dairy products and other goods, effective September 29.
Section 232 Treatment Also Changes
The U.S. also announced that it would no longer exempt from the Section 232 tariffs certain Canadian imports appearing on the auto and alcohol lists. The original July actions generally excluded products already subject to Section 232 tariffs; however, the September proclamations eliminated or narrowed that protection for certain covered goods, subjecting them to both the Section 338 and Section 232 tariff rates.
What This Could Mean for Foundries
The latest actions add another layer of complexity for foundries, suppliers and manufacturers operating across the U.S.-Canada supply chain. Members may want to pay particular attention to:
Review whether affected tooling, machinery, equipment or other inputs are moving between U.S. and Canadian operations.
The interaction of Section 338 and Section 232 measures makes product classification and applicable duty treatment particularly important for covered imports.
Manufacturers with Canadian customers or suppliers may want to identify where tariff exposure exists throughout their supply chains.
Continue watching U.S.-Canada discussions and the broader USMCA review process for developments affecting cross-border manufacturing.
What Comes Next
While the sides had not scheduled formal negotiations for September, there are some signs that President Trump and Prime Minister Carney are creating room for discussions to resume. Any talks, however, must still account for USMCA renewal discussions underway with Mexico but yet to begin between the U.S. and Canada.
Key Dates
Initial U.S. Section 338 actions announced.
Initial U.S. Section 338 measures take effect.
Canadian counter-tariffs take effect and the White House issues five new proclamations.
Changes to the U.S. product scope take effect.
Certain U.S. import prohibitions are scheduled to take effect.
Stay Ahead of What Comes Next
The Foundry Brief tracks legislative, regulatory and trade developments affecting the metalcasting industry and helps NFFS members understand what they could mean for business.
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