Canada hits U.S. imports with new 15%–50% counter-tariffs from September 8
Canada has imposed retaliatory surtaxes of 15%, 25% or 50% on hundreds of U.S.-origin tariff lines — spanning dairy, appliances, paper, textiles, furniture, electronics and more — in response to new U.S. Section 338 tariffs on Canadian goods. Importers of U.S.-origin goods on the listed tariff items should check their HS codes now, confirm origin under CUSMA marking rules, and review whether remission or the in-transit exception applies.
What happened
Canada has issued the United States Surtax Order (2026), imposing counter-tariffs of 15%, 25% or 50% on U.S.-origin goods listed in Schedules 1, 2 and 3, calculated on value for duty under sections 47–55 of the Customs Act (s.1(1)). The move responds to the U.S.'s August 22, 2026 imposition of 50% Section 338 tariffs on $27.6 billion of Canadian goods; Canada's counter-tariffs are designed to match that figure dollar-for-dollar and generally mirror the U.S. rates. The order took effect September 8, 2026, or the date of registration if later (s.10).
Who is affected
The surtax hits U.S.-origin goods classified under specific tariff items in three schedules: Schedule 1 (15%) covers items like hand tools, agricultural machinery parts and pumps; Schedule 2 (25%) covers dairy products, plywood, paper products, carpets, cutlery, appliances, rail equipment and electronics; Schedule 3 (50%) covers other dairy lines, chocolate/confectionery, cosmetics, plastics, wood products, paper goods, apparel, tile, copper articles and furniture/toys. Origin is determined using the existing CUSMA country-of-origin marking rules, not simply where goods ship from (s.1(2)). Fish and seafood products were considered for the list but removed after stakeholder consultation flagged harm to domestic processors.
Exemptions and exceptions
Four categories are carved out even if otherwise classifiable under Schedules 1–3: goods under Chapter 98 or 99 tariff items not listed in Schedule 4 (s.2(a)); goods already in transit to Canada on the day the order comes into force (s.2(b)); personal/household goods brought in by Campobello Island, New Brunswick residents returning from a short absence (s.2(c)); and goods imported under an Import for Re-Export Program permit (s.2(d)).
What importers should do now
Confirm whether your imported goods fall under a tariff item in Schedule 1, 2 or 3, and verify U.S. origin status under the CUSMA marking regulations rather than assuming shipment origin equals country of origin. If goods were already in transit to Canada before September 8, 2026, they are exempt — keep shipping documentation to substantiate the timing. Businesses using U.S.-origin inputs for manufacturing, processing, food/beverage packaging, agricultural production, or for health care, public health, public safety or national security purposes should check eligibility under the United States Surtax Remission Order (2025), which has been extended by this order to cover these new surtaxes.
The refund angle
The consequential amendments extend the existing United States Surtax Remission Order (2025) to surtaxes paid or payable under this new order, meaning importers who qualify under the remission order's categories — manufacturing/processing inputs, agricultural production, food/beverage packaging, or health/public safety/national security end-uses — can seek relief or refunds of surtax already paid, subject to the remission order's terms and conditions. The CBSA administers remission claims and aims for a 90-day processing standard for refunds, though this is described as a target, not a guarantee.