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Canada matches the Section 338 duties, dollar for dollar

7 September 2026

The additional 50 percent duties on Canadian motor vehicles, alcoholic beverages and dairy products took effect at 12:01 a.m. eastern time on 22 August 2026, the date Proclamation 11056 had substituted for 19 August (see Canada’s Section 338 duties are ‘suspended’ by moving their start date three days).1 No further proclamation followed.2 On 25 August the Department of Finance Canada announced countermeasures. Canada “will impose 15, 25, and 50 per cent tariffs on products drawn from those targeted by U.S. Section 338 and Section 232 tariffs, with individual product rates based on the matching U.S. rate for the same goods,” effective 12:01 a.m. on 8 September 2026 and covering 629 tariff items.3 The release describes this as matching “the new U.S. tariffs dollar for dollar, rate for rate.”4 Finance Minister François-Philippe Champagne said that “[w]hen the United States asked too much and offered too little, we chose to stand up for Canadians.”4

  1. Matching happens item by item rather than in the aggregate. Of the 629 tariff items on Canada’s list, 413 carry a 50 percent rate, 195 carry 25 percent and 21 carry 15 percent, each set to “the matching U.S. rate for the same goods.”3 That is a different instrument from a lump retaliation of equivalent value: a Canadian importer’s rate is determined by what the United States charges on the same tariff line, so the schedule moves if the American one does.3

  2. The two dollar figures on the record describe one measure in two currencies. This corpus reported the three proclamations of 20 July as covering approximately USD 20 billion of imports; Canada describes the same 22 August action as “a 50 per cent tariff on $27.6 billion of Canadian goods” and does not name a currency.54 The Bank of Canada’s daily exchange rate on 25 August, the date of the release, was 1.3839 Canadian dollars to the US dollar, at which USD 20 billion is CAD 27.7 billion.6

  3. Canada’s list is built from two American programmes, not the one it answers. The Section 338 duties reached motor vehicles, alcohol and dairy; the countermeasures draw on goods targeted by “U.S. Section 338 and Section 232 tariffs” and concentrate on “steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.”37 The surtaxes apply only to goods that qualify to be marked as US goods under the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations, and do not apply to goods in transit to Canada on the day they come into force.3

  4. What justified the three-day suspension did not survive it. Recital 4 of Proclamation 11056 rested the suspension on reports that “Canada has expressed a commitment to remove the discriminations or unreasonable and unequal impositions at issue,” and on the view that “because of the status of these negotiations, the public interests favor suspending” the duties.1 The Canadian release states that “the U.S. proposed new terms that were not in Canada’s best interest” and that “Canada therefore suspended negotiations rather than accepting a bad deal.”4 Each government describes the other as having ended the talks; the duties attached on the date the proclamation set.14

Footnotes

  1. Proclamation 11056 of 18 August 2026, “Temporary Suspension of Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States,” 91 FR 54789, published 24 August 2026, FR Doc. 2026-17294. The operative paragraph provides that the effective date of the duties “shall be 12:01 a.m. eastern time on August 22, 2026,” amending the chapeau of Annex II of each of Proclamations 11046, 11047 and 11048 “by deleting the effective date ‘August 19, 2026’ and inserting ‘August 22, 2026’ in lieu thereof.” Recital 4 quoted for the reported Canadian commitment and the status of negotiations; paragraph (4) provides for refunds of duties collected. https://www.federalregister.gov/documents/2026/08/24/2026-17294/temporary-suspension-of-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of ↩ ↩2 ↩3

  2. Federal Register presidential documents published between 20 August and 6 September 2026 carry no further proclamation on the Section 338 Canadian duties; Proclamation 11056 of 24 August is the last. Checked 7 September 2026. https://www.federalregister.gov/documents/search?conditions%5Bterm%5D=Canadian+Discrimination+Against+the+Commerce+of+the+United+States ↩

  3. Department of Finance Canada, “List of products from the United States subject to counter-tariffs effective September 8, 2026,” backgrounder, list updated as of 26 August 2026. The table carries 629 tariff items at the tariff-item level, to be “read in conjunction with the Schedule to Canada’s Customs Tariff,” under the heading “List of Goods Subject to Surtax – Effective September 8, 2026.” Counted from the published table on 7 September 2026: 413 items at 50 per cent, 195 at 25 per cent and 21 at 15 per cent. The backgrounder states the measures “will be effective as of 12:01 a.m., September 8, 2026”; that they “only apply to goods originating from the U.S., which shall be considered as those goods eligible to be marked as a good of the U.S. in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations”; that they “do not apply to U.S. goods that are in transit to Canada on the day on which they come into force”; and that administration details will appear in Canada Border Services Agency customs notices. https://www.canada.ca/en/department-finance/news/2026/08/list-of-products-from-the-united-states-subject-to-counter-tariffs-effective-september-8-2026.html ↩ ↩2 ↩3 ↩4 ↩5

  4. Department of Finance Canada, “Canada announces targeted countermeasures and substantive support for workers and businesses in response to U.S. tariffs,” news release, Ottawa, 25 August 2026. Quoted: “Following the U.S. decision to impose a 50 per cent tariff on $27.6 billion of Canadian goods effective August 22”; “Canada will match the new U.S. tariffs dollar for dollar, rate for rate”; “the U.S. proposed new terms that were not in Canada’s best interest, basically, asking too much of Canada, and offering too little in return. Canada therefore suspended negotiations rather than accepting a bad deal”; and the Champagne quotation. The release also announces a “$7.5 billion package of new and enhanced measures,” itemised as $1.5 billion through the Regional Tariff Response Initiative, a $500 million liquidity stream under the Business Development Bank of Canada’s Pivot to Grow program, $2 billion through a new Canada Strong Diversification Fund, $3.5 billion in Rapid Response Supports for Workers and Employers including the new Worker Retention and Retraining Program, and new flexibilities in the Large Enterprise Tariff Loan facility, building on “nearly $25 billion in supports” since the US tariffs began. Ministers Champagne, Joly, Solomon and Hajdu announced the measures. The release does not state a currency for any figure. https://www.canada.ca/en/department-finance/news/2026/08/canada-announces-targeted-countermeasures-and-substantive-support-for-workers-and-businesses-in-response-to-us-tariffs.html ↩ ↩2 ↩3 ↩4 ↩5

  5. The three proclamations of 20 July 2026 — 11046 (alcoholic beverages), 11047 (dairy) and 11048 (motor vehicles) — imposed an additional 50 percent ad valorem duty on Annex II lists covering approximately USD 20 billion of imports, originally effective 19 August 2026. See Three Section 338 proclamations impose 50% duties on Canadian autos, alcohol and dairy. ↩

  6. Bank of Canada, daily exchange rate FXUSDCAD, observation for 25 August 2026: 1.3839 Canadian dollars per US dollar. The rate on 21 August, the last business day before the duties attached, was 1.3760. https://www.bankofcanada.ca/valet/observations/FXUSDCAD/json?start_date=2026-08-19&end_date=2026-08-26 ↩

  7. Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862, the authority behind the metals tariffs Canada’s list also draws on. See Proclamation modifies Section 232 metals tariff framework. https://www.govinfo.gov/link/uscode/19/1862?link-type=html ↩

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