U.S.-Canada Tariff Update
On Friday, August 21, 2026, at 11:24 PM Eastern, U.S. Customs issued a guidance imposing tariffs of 50% on roughly 5% ($20 billion) of imports from Canada, effective at 12:01AM Eastern, Saturday, August 22, 2026. Canadian PM Carney on Saturday indicated that Ottawa would retaliate “dollar for dollar” starting on September 8, 2026. As of this writing, a list of proposed U.S. goods potentially subject to Canadian tariffs was not made available. However, the delayed implementation may allow the sides to resume discussions.
Sources indicate that a potential agreement fell apart an hour prior to the midnight deadline, with the Canadian side alleging that the U.S. sought to impose restrictions on the ability to negotiate trade agreements with other countries. Throughout the week, the U.S. appeared to offer lowering the Section 232 on steel and aluminum from 50% to 25%. For autos, PM Carney indicated that the U.S. was only willing to reduce the tariffs to 25% for light vehicles, and not for medium- and heavy-duty trucks, which are covered under a separate Section 232 tariff action than passenger vehicles and light trucks.
PM Carney stated, that “F350s [trucks], 450s, 550s, they would have been excluded. GM Silverado; same thing, would have been excluded from [the lower tariff rate].” Concern arose over whether Ford would proceed with its planned $5 billion investment to retool its plant in Ontario to produce F-series trucks. Discussions also centered on a carveout for auto parts only originating from the U.S., leaving the total tariff rate on autos closer to 7.5%, rather than a rate of 5% Canada may have accepted.
In addition to lowering tariffs to 25% on imported Canadian steel and aluminum, discussions also centered on Canada lifting retaliatory tariffs on U.S. steel, aluminum, and autos, and change administrative measures to address U.S. concerns over dairy and alcohol.
- CBP CSMS #69606660 - Guidance: Section 338 Additional Duties on Certain Goods of Canada - CBP implementation guidance, issued 11:16 p.m. ET Aug. 21; duties effective 12:01 a.m. ET Aug. 22.
- USTR statement on X (@USTradeRep) - Ambassador Greer's Friday night statement on the collapse of talks.
- Statement by the Prime Minister on Canada-U.S. trade negotiations - PMO, Aug. 21; Canada suspends negotiations, pledges to match tariffs dollar for dollar.
- Proclamation 11047 - Dairy - signed July 20, 2026.
- Proclamation 11046 - Alcoholic Beverages - signed July 20, 2026.
- Proclamation 11048 - Motor Vehicles - signed July 20, 2026.
- Temporary Suspension Proclamation - signed Aug. 18, the three-day pause that expired last night.