Canada-U.S. Tariffs Explained for Canadians

Featured image: Traffic on the Ambassador Bridge between Windsor, Ontario, and Detroit, one of the main truck crossings on the Canada-U.S. border. Photo: Mikerussell via Wikimedia Commons (CC BY 3.0).

Canadian exporters should not expect relief from U.S. tariffs before the American midterm elections on Nov. 3, 2026. Canadian officials have been telling industry groups for weeks that no Canada-U.S. trade deal is expected before that vote, three sources told CBC News on Oct. 20. Canada-U.S. Trade Minister Dominic LeBlanc confirmed it the same day. For businesses from British Columbia to Nova Scotia, and for the New England companies that buy from and sell to them, that leaves a layered set of duties in place into the winter, plus a threatened increase on Jan. 1, 2027.

This guide sets out which tariffs apply now, which Canadian goods can no longer enter the United States at all, what Canada has imposed in return, and what is at stake for Massachusetts.

The tariffs on Canadian goods right now

The U.S. tariff picture changed several times in 2026. In February, the U.S. Supreme Court held that the International Emergency Economic Powers Act does not allow the President to impose tariffs, which ended the emergency tariffs first placed on Canada in 2025. According to a Sept. 16 report by the nonpartisan Congressional Research Service (CRS), the administration replaced them with a 150-day 10% surcharge, and when that expired in July 2026 it imposed a 10% tariff on most Canadian goods under Section 301 of the Trade Act of 1974.

The CRS lists these U.S. tariffs on Canada as of Sept. 15, 2026:

Most goods, 10% (Section 301): goods certified as compliant with the Canada-United States-Mexico Agreement (CUSMA, called USMCA in the U.S.) are exempt.
Steel, aluminum and copper, 50% (Section 232): no CUSMA exemption.
Passenger vehicles and auto parts, 25%; trucks, 25%; buses, 10% (Section 232): parts that meet CUSMA rules are fully exempt and vehicles partly exempt.
Timber and lumber, 10%; certain wood products, 25%; certain semiconductors, 25%; patented pharmaceuticals, 100% (Section 232): no CUSMA exemption.
Alcohol, dairy, paper and wood products and some steel and aluminum, 50% (Section 338): imposed in August 2026 and, from Sept. 15, mostly charged on top of Section 232 duties.

The CUSMA exemption still matters most. Census data cited by the CRS show the U.S. collected duties on about 15% of imports from Canada by value in 2025, about $56 billion (US) in goods, with roughly $10 billion in duties. Most Canadian goods still entered duty-free, likely because they were certified as CUSMA-compliant.

Goods now banned at the border

Since 12:01 a.m. ET on Sept. 29, 2026, some Canadian products cannot be imported into the United States at all. A U.S. Customs and Border Protection notice says entries containing covered goods are “unconditionally rejected” under Presidential Proclamations 11061, 11062 and 11063. The ban covers:

most packaged Canadian alcohol, including beer, wine, cider and spirits
whey and whey products
several types of molasses
non-alcoholic beer
motorcycles and mopeds with piston engines over 800 cc

The motor vehicle ban is a single tariff line. It does not cover cars, light trucks or parts. Goods that were already in a bonded warehouse or foreign trade zone before the deadline can still be withdrawn, but they pay the 50% duty.

The bans covered too few products to disrupt Canada’s national economy, CBC News reported, but they hit producers in sectors already squeezed by tariffs.

Canada’s counter-tariffs

Ottawa has answered each round. After the August Section 338 tariffs, Canada imposed retaliatory tariffs on C$27.6 billion (about US$20 billion) of U.S. goods on Sept. 8, 2026, according to the CRS. Earlier Canadian tariffs remain on U.S. vehicles and on C$15.6 billion of U.S. steel and aluminum. Some provinces have taken their own steps on U.S. alcohol sales and government purchasing.

The Canada Border Services Agency publishes the list of U.S. products subject to these surtaxes. Canadian importers, and Canadian residents bringing goods home from U.S. trips above their personal exemption, should check it before buying.

What the Jan. 1, 2027 threat would mean

After talks broke down in August, President Donald Trump wrote on Truth Social that “On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts and Steel will be increased to 50%.” CBC reported that no legal paperwork putting that increase into force had been published as of Oct. 20. “We haven’t seen any paperwork,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.

Canada’s minister of international trade, Maninder Sidhu, met U.S. Trade Representative Jamieson Greer at a G20 trade ministers’ meeting in Milwaukee, the Globe and Mail reported. Greer said technical talks continue but “there are a handful of outstanding issues that are quite difficult to resolve.” Sidhu said: “When you negotiate with Canada, it has to be mutually beneficial.”

A larger deadline sits behind the tariffs. In July 2026, Canada and Mexico said they wanted to renew CUSMA, and the United States declined to, according to the CRS. Without renewal, the agreement is set to expire in 2036.

Why it matters for Massachusetts and New England

Canada is one of Massachusetts’ biggest customers. The Office of the U.S. Trade Representative ranks it as the state’s second-largest export market in 2025, after the United Kingdom. Figures compiled by the Embassy of Canada in Washington from 2025 data show:

Massachusetts goods exports to Canada: $3.1 billion (US), led by optical, medical and precision instruments ($482 million) and computers ($328 million).
Massachusetts services exports to Canada: $3.0 billion, including $623 million in travel and education spending.
Massachusetts goods imports from Canada: $10.0 billion, led by fuel oil ($2.5 billion), fish and crustaceans ($1.6 billion) and natural gas ($1.0 billion).
Canadian-owned employers in Massachusetts: 272 companies with 31,550 workers.

Those import lines matter for prices in the region, because the state relies on Canadian heating fuel, natural gas and seafood. New England as a whole exported nearly $8.8 billion in goods to Canada in 2025, according to the New England Council.

Practical steps for Canadian businesses

Confirm CUSMA certification on every shipment. It is the main route to duty-free entry under the 10% Section 301 tariff and the auto parts tariff.
Check tariff lines, not product names. The Sept. 29 bans apply by Harmonized Tariff Schedule code, so the CBP annexes decide what is covered.
Price in “stacking.” Section 338 duties now mostly apply on top of Section 232 duties for steel, aluminum and wood products.
Plan for Jan. 1 without assuming it. The 50% auto and steel increase has been announced on social media, but no implementing document has been published.

Additional details

Small parcels: a separate U.S. action ended duty-free treatment for shipments under $800, including from Canada, and that action faces legal challenges, the CRS says.
Softwood lumber: U.S. anti-dumping and countervailing duties on Canadian softwood still apply on top of the other lumber tariffs. The last lumber agreement expired in 2015.
Energy: Canada supplied 64% of U.S. crude oil imports by quantity in 2025, up from 41% in 2015, per the CRS.
Related coverage: See our October look at U.S. tariffs, the budget and jobs and our report on Alberta’s referendum result.

Sources

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