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ARTICLE · 26 AUGUST 2026

Tit For Tat? Section 338 Tariffs Take Effect As Canada Prepares To Retaliate

Gowling WLG
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U.S. President Trump's 50% Section 338 tariffs on Canadian goods took effect on August 22, 2026, after trade negotiations collapsed over issues including dairy access, provincial alcohol bans, and constraints on Canada's trade autonomy. Prime Minister Carney suspended talks and announced dollar-for-dollar retaliatory measures effective September 8, 2026, targeting steel, dairy, appliances, agricultural equipment, and electronics.

CanadaInternational Law
Margaret Kim
Margaret Kim
Wendy Wagner
Wendy Wagner
Jacques Shore
Jacques Shore
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As we noted in our previous article, “The Latest Shot Across the Bow: U.S. Threatens 50% Tariffs on Canadian Goods,” U.S. President Trump’s three Section 338 proclamations announced the imposition of a 50% tariff on over 550 Harmonized Tariff Schedule (HTS) subheadings of Canadian goods, effective August 19, 2026. Canada and the United States engaged in negotiations during that window, with the looming Section 338 deadline serving as the catalyst. The U.S. extended the deadline by 72 hours as the parties continued negotiating, but ultimately, no agreement was reached.

On Friday, August 21, Prime Minister Mark Carney suspended trade negotiations and recalled Canada’s negotiators to Ottawa. The 50% Section 338 tariffs took effect hours later, at 12:01 a.m. Eastern Time on Saturday, August 22, 2026, covering approximately US$20 billion in Canadian exports, some 5% of Canada’s total exports to the United States. The tariffs target dairy, alcoholic beverages, and motor vehicles as

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