Canada Tariff Rates 2026: 10% on US Imports

Canada is the second-largest source of US imports at $421B annually, with USMCA-qualifying goods normally entering duty-free. The headline change: a new 50% Section 338 tariff on select Canadian goods (autos, alcohol, dairy, furniture and more) took effect August 22, 2026 after US-Canada talks collapsed — and it applies even to USMCA-qualifying goods (energy, potash, Section 232-covered goods, fish, and critical minerals are excluded). Canada's dollar-for-dollar retaliation — 15/25/50% on $27.6B of US goods — took effect September 8, 2026. Outside those Section 338 categories, non-USMCA goods face a 10% Section 301 forced-labor tariff (which replaced Section 122 on July 24, 2026) on top of MFN duties, while Section 232 metals tariffs apply at 50% on articles wholly of steel/aluminum and 25% on derivative products (both on full customs value, after the April 6, 2026 restructuring).

The US-Canada trade relationship is governed by USMCA (the successor to NAFTA), which eliminates tariffs on goods meeting rules of origin requirements. Canada is a critical energy supplier, providing roughly 60% of US crude oil imports. Two-way goods trade exceeds $700B annually, making it one of the deepest bilateral trade relationships in the world.

Key Products Imported from Canada

Top imports from Canada include crude oil and petroleum products, passenger vehicles and auto parts, machinery, lumber and wood products, and natural gas. Canada is also a major supplier of aluminum, potash, and agricultural goods such as canola and beef.

Recent Changes

Aug 22, 2026: A 50% Section 338 tariff on select Canadian goods (autos, alcohol, dairy, furniture and more) took effect at 12:01 a.m. ET after US-Canada trade talks collapsed following a three-day pause — the first modern use of Section 338 of the Tariff Act of 1930. It applies even to USMCA-qualifying goods; energy, potash, Section 232-covered goods, fish, and critical minerals are excluded. Prime Minister Mark Carney suspended negotiations and confirmed Canada's dollar-for-dollar retaliation (steel, dairy, appliances, agricultural equipment, pulp/paper, electronics), which took effect 12:01 a.m. September 8, 2026 with no last-minute deal. Feb 20, 2026: Supreme Court struck down IEEPA tariffs 6-3; Canada's 10% rate now falls under the Section 301 forced-labor tariff, which replaced the expired Section 122 baseline on July 24, 2026. Section 232 tariffs on Canadian metals are 50% on articles wholly of steel/aluminum and 25% on derivative products (restructured effective April 6, 2026, both on full customs value; the 50% tier was doubled from 25% in June 2025). Approximately 89% of Canadian imports claim USMCA exemption (per Penn Wharton data). At the July 1, 2026 joint review the US declined to renew USMCA in its current form; the agreement remains fully in force with USMCA 0% preferential treatment unchanged, and non-renewal triggers annual reviews for up to 10 years — USMCA would expire July 1, 2036 only if no extension is ever agreed.

Tips for Importers

Ensure your goods qualify under USMCA rules of origin to avoid the 10% Section 301 forced-labor tariff (which replaced Section 122 on July 24, 2026) — the certification process requires documenting North American content thresholds. For steel and aluminum, consider whether your product qualifies for any exclusion under the Section 232 process. Section 122 expired July 24, 2026 at its 150-day limit and was replaced the same day by the forced-labor tariff, so plan inventory accordingly. FTZs near the northern border can defer or reduce duties on goods destined for re-export.