US-Canada Tariffs 2026: 50% Section 338 Duty on ~$20B + Canada's Sept 8 Retaliation
Canadian car tariff — direct answers
What is the tariff on Canadian cars?
Direct answer: Canadian cars and auto parts currently face a 25% U.S. tariff, and President Trump has threatened to double it to 50% on January 1, 2027 — the 50% rate is a proposal that is not yet in effect.
When do Canadian auto tariffs take effect?
Direct answer: The threatened 50% tariff on Canadian cars, trucks, and auto parts would take effect January 1, 2027, and has not been enacted — while the separate 50% Section 338 duty on roughly $20B of Canadian goods already took effect August 22, 2026.
Will car prices go up?
Direct answer: Likely for at least some models — with the 50% Section 338 duty already in effect and a 50% auto tariff threatened for January 2027, analysts say the chances are high that at least some tariff costs land on consumers (CNN, Aug 24, 2026).
What happened
On July 20, 2026, President Trump signed three proclamations (11046, 11047, 11048) under Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338) — the first-ever use of that authority — imposing an additional 50% ad valorem duty on Canadian motor vehicles, alcoholic beverages, and dairy. The original August 19 effective date was suspended for three days on August 18 to allow talks; the Aug 19–21 negotiations collapsed, and the duty took effect at the rescheduled time.
USTR Jamieson Greer said minutes before the deadline: "Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week." On Aug 24, 2026, President Trump announced on Truth Social that U.S. tariffs on Canadian cars, trucks, auto parts and steel will rise to 50% on January 1, 2027 — from 25% on autos/parts (steel is already at 50%) — an announcement only, with no proclamation signed yet. On Aug 25, 2026, Finance Minister François-Philippe Champagne confirmed Canada will match U.S. duties "dollar for dollar, rate for rate" with counter-tariffs of 15%, 25% and 50% on C$27.6 billion of U.S. imports, effective 12:01 a.m. ET, Tuesday, September 8, 2026 (629 tariff items, revised Aug 26; applies to US-origin goods only; U.S. goods already in transit on Sept 8 are exempt; autos NOT on the list — separate existing 25% order; fish/seafood removed in the revision). Champagne: "When the United States asked too much and offered too little, we chose to stand up for Canadians." PM Carney said of the collapse: "You're at war when you get attacked. We got attacked."
Affected categories and rates
Coverage spans roughly $20 billion of Canadian exports (~5% of Canada's annual exports to the U.S.) — products described in coverage as ranging "from hockey sticks to tongue depressors." The full line-level HTS list lives in the three proclamations; the categories below are the verified scope.
| Category | Rate | Effective | Legal basis |
|---|---|---|---|
| Motor vehicles & auto parts (plus Annex II goods: furniture, sporting goods, hockey equipment, jewelry, etc.) | 50% additional ad valorem | Aug 22, 2026, 12:01 a.m. ET | Proclamation 11048 |
| Alcoholic beverages (beer, wine, liquor, cider, other fermented beverages) | 50% additional ad valorem | Aug 22, 2026, 12:01 a.m. ET | Proclamation 11046 |
| Dairy (cheeses of all types; milk, cream, whey, lactose, sugars, non-alcoholic beer) | 50% additional ad valorem | Aug 22, 2026, 12:01 a.m. ET | Proclamation 11047 |
| Other Annex II goods — cement, honey, plywood/wood products, plastics, paper, candles, apparel, wigs, chandeliers, pools, fishing rods, ice skates, etc. | 50% additional ad valorem | Aug 22, 2026, 12:01 a.m. ET | Annex II of Proclamations 11046/47/48 |
| Steel & aluminum (pre-existing, NOT part of this action) | Pre-existing Section 232 duties | Pre-existing | Section 232 regime |
| Lumber (pre-existing levy) | 10% (pre-existing) | Pre-existing | Section 232 |
The 50% duty stacks on top of regular MFN/CUSMA rates and other applicable duties. Pre-existing steel, lumber, and auto tariffs remain in force. Excluded from the new duty: energy products, potash, fish, critical minerals, and goods already under Section 232. USMCA/CUSMA origin does not shield covered goods.
⚠️ THREATENED — NOT IN EFFECT: 50% tariff on Canadian cars, trucks & auto parts proposed for January 1, 2027
On Monday, August 24, 2026, President Trump threatened to raise U.S. tariffs on Canadian cars, trucks, and auto parts from the current ~25% to 50%, with an effective date of January 1, 2027. The threatened 50% auto rate is a proposal, not an enacted tariff — the current effective rate on Canadian autos remains ~25%.
Context: the auto threat is the latest escalation after the 50% tariffs on ~$20B of Canadian goods took effect August 22, 2026, and Canada announced dollar-for-dollar retaliation starting September 8, 2026. Trump framed the move as leverage: "We don't need Canada, they need us."
Sources: CNN — Trump is threatening 50% tariffs on Canadian cars · CNBC — Trump says U.S. will hike Canada auto tariffs to 50% · CP24 — 'We don't need Canada, they need us': Trump threatens 50% tariffs on all cars, trucks
What the rejected deal would have meant — NOT enacted
The deal Canada declined on Aug 21, 2026 would have reduced U.S. tariffs — it is not in force and never took effect:
- Steel & aluminum: would have been cut to 25% (rejected)
- Automotive duties: would have been lowered to 15% (rejected)
- Lumber 10% levy: would have been eliminated (rejected)
Instead, the 50% Section 338 duty took effect Aug 22, 2026. You can model the rejected offer as a what-if scenario in the Tariff Calculator 2026 ("Rejected US–Canada deal offer — what-if, NOT enacted"), but the live estimate uses the enacted 50% rate.
Why the talks failed
Three days of talks in Washington (Aug 19–21) followed the August 18 three-day suspension, which was premised on a preliminary deal "subject to finalization of documents." That finalization never happened — the talks collapsed on Friday, August 21, before the rescheduled deadline. Greer blamed "new demands and walk-backs of other commitments by Canada"; Carney said "last-minute changes in the U.S. proposed terms were unfair, uneconomic," adding "They asked too much and they offered too little." Negotiations are suspended, Canada's team has been recalled to Ottawa, and no new talks are scheduled. Asked whether this was a trade war, Carney replied: "You're at war when you get attacked. We got attacked."
Canada's retaliation: confirmed 15/25/50% counter-tariffs start September 8, 2026
Confirmed August 25, 2026: Canada will impose counter-tariffs of 15%, 25% and 50% on C$27.6 billion of U.S. imports (about 8% of total U.S. exports to Canada, based on 2025 Census data), effective 12:01 a.m. ET, Tuesday, September 8, 2026. Each product rate matches the corresponding U.S. rate — products are drawn from those targeted by U.S. Section 338 and Section 232 tariffs. The official Finance Canada list was revised Aug 26 to 629 tariff items (413 at 50%, 195 at 25%, 21 at 15%). The tariffs apply only to goods originating from the U.S., and U.S. goods already in transit to Canada on Sept 8 are not covered. A C$7.5 billion support package (on top of nearly C$25B in cumulative supports) accompanies the measures; existing Canadian counter-tariffs on U.S. autos remain in place (autos are NOT on the Sept 8 list, and fish/seafood were removed in the Aug 26 revision).
| Canada-side tier | What's covered (official list) | Examples from the list (HS) | Effective |
|---|---|---|---|
| 50% — 413 items | Steel & aluminum products previously subject to only a 25% counter-tariff, furniture, clothing and apparel, pulp and paper, plywood, cosmetics, plastics, smartphones/networking | Flat-rolled steel coil (7208.25.00), aluminum sheet (7606.12.00), metal furniture (9403.20.00), cotton t-shirt (6109.10.00), motorcycle >800cc (8711.50.00) | Sept 8, 2026, 12:01 a.m. ET |
| 25% — 195 items | Appliances, dairy products such as cheese, carpets, household paper products, sawn wood, power tools, cutlery, certain steel and aluminum derivatives | Household refrigerator (8418.21.00), cheddar cheese (0406.20.11), semi-trailer (8716.39.30) | Sept 8, 2026, 12:01 a.m. ET |
| 15% — 21 items | Air conditioners/heat pumps, lift trucks, lifts/conveyors/industrial robots, mowers, moulds, metal-working dies/tools | Window/wall air conditioner (8415.10.00), tractor-mounted mower (8433.20.00) | Sept 8, 2026, 12:01 a.m. ET |
These are Canada-side duties on U.S. goods entering Canada — separate from the 50% U.S. duty on Canadian goods entering the United States. Champagne described the approach as "dollar for dollar, rate for rate": the 50% tier covers steel and aluminum products that had been at only a 25% counter-tariff, furniture, and clothing; the 25% tier covers appliances, cheese and other dairy, carpets, sawn wood, and steel/aluminum derivatives; a small 15% group covers air conditioners, heat pumps, lift trucks, mowers, moulds, and tool parts. Steel imports into Canada have already fallen ~30% since the earlier 25% counter-tariff, and Canadian officials expect the 50% rate to cut them further. Importers shipping U.S. goods north should model this as an additional Canada-side landed cost — and confirm the exact HTS line against the official 629-item list (revised Aug 26), since the tier varies by product. Autos are NOT on the Sept 8 list; fish and seafood were removed in the Aug 26 revision. See the complete verified tier table →
Calculate your duty
The updated Tariff Calculator 2026 includes the 50% duty in your estimate when you select Canada and a covered product category (Automotive, Food & Beverages, Dairy Products, Alcoholic Beverages, or Canada Section 338 Covered Goods) with an import date on or after August 22, 2026. The calculator shows the effective date, the statutory basis, and sources with every estimate — and flags the rejected-deal what-if preset separately so it is never confused with the live rate.
For U.S. goods shipped to Canada: switch "Shipping To" to Canada, keep country of origin as United States, and select a covered category. On or after September 8, 2026 the calculator applies the confirmed tier — 50% for steel & metals (steel/aluminum), furniture, textiles/apparel, chemicals, toys; 25% for electronics, dairy, household appliances, carpets, sawn wood; 15% for farming equipment — with the official 629-item scope (revised Aug 26), the US-origin rule, and the in-transit exemption shown on every estimate. Before Sept 8 the retaliation shows as PENDING (0%), so you can compare today's cost vs. the September 8 rate with the entry-date control.
FAQ
Q: Are the US-Canada 2026 tariffs in effect right now?
A: Yes — the 50% additional duty on roughly $20B of Canadian goods took effect Saturday, August 22, 2026 at 12:01 a.m. EDT (04:01 GMT) under Section 338 of the Tariff Act of 1930, after talks failed. The original Aug 19 date was pushed by the Aug 18 three-day suspension.
Q: Which products are covered?
A: Motor vehicles and auto parts, alcoholic beverages (beer, wine, liquor, cider), dairy including cheeses of all types, and Annex II goods — from hockey equipment and furniture to cement, honey, plywood, plastics, paper, candles, apparel, wigs, chandeliers, pools, and fishing rods.
Q: What about the 25% steel, 15% autos, and 10% lumber rates?
A: Those were the rejected deal offer — steel/aluminum would have been cut to 25%, autos to 15%, and the lumber levy eliminated. They were never enacted. The 50% Section 338 duty is what applies to covered goods.
Q: Does USMCA/CUSMA protect my goods?
A: No. The Section 338 duties apply to all covered goods regardless of whether they originate under USMCA/CUSMA.
Q: What is excluded?
A: Energy products, potash, fish, critical minerals, and goods already subject to Section 232 tariffs (steel, aluminum, copper, autos, lumber). Pre-existing steel/lumber/auto duties remain and stack where applicable.
Q: What is Canada's retaliation?
A: Confirmed Aug 25, 2026: counter-tariffs of 15%, 25% and 50% on C$27.6 billion of U.S. imports — 629 tariff items (revised Aug 26), rate for rate matching the U.S. duty — effective 12:01 a.m. ET, September 8, 2026. 50%: steel/aluminum, furniture, clothing, pulp/paper, electronics. 25%: appliances, cheese/dairy, carpets, sawn wood, steel/aluminum derivatives. 15%: air conditioners, heat pumps, lift trucks, mowers, moulds, tool parts. Autos are NOT on the Sept 8 list (separate existing 25% order); fish & seafood were removed in the Aug 26 revision. Applies only to US-origin goods; US goods in transit on Sept 8 are exempt. A C$7.5B support package accompanies the measures. Talks collapsed before the U.S. duties took effect; Carney said the situation felt like war — "You're at war when you get attacked. We got attacked." — and Canada's negotiating team has been recalled to Ottawa.
Q: What is the tariff on Canadian cars?
A: Canadian cars and auto parts currently face a 25% U.S. tariff, and President Trump has threatened to double it to 50% on January 1, 2027 — the 50% rate is a proposal that is not yet in effect.
Q: When do Canadian auto tariffs take effect?
A: The threatened 50% tariff on Canadian cars, trucks, and auto parts would take effect January 1, 2027, and has not been enacted — while the separate 50% Section 338 duty on roughly $20B of Canadian goods already took effect August 22, 2026 at 12:01 a.m. EDT.
Q: Will car prices go up?
A: Likely for at least some models: analysts say the chances are high that at least some tariff costs land on consumers, with the 50% Section 338 duty already in effect and a 50% auto tariff threatened for January 1, 2027 (CNN, Aug 24, 2026).
Q: Is the 50% tariff on cars in effect?
A: No. The 50% tariff on Canadian cars, trucks, and auto parts threatened by President Trump on August 24, 2026 is proposed for January 1, 2027 and is not in effect — the current U.S. tariff on Canadian auto imports is 25%.
Q: What is the Canadian car tariff in 2026?
A: In 2026, Canadian-built cars and auto parts face a 25% U.S. tariff today, with 50% threatened for January 1, 2027. Model both scenarios in the Tariff Calculator 2026 by selecting Canada and the Automotive category — the threatened scenario is a separate what-if preset, not the default rate.
Related guides: Canada Counter-Tariffs September 2026 — full 15/25/50% tier list · Canada 50% Section 338 tariff explainer · How the 50% Canada tariffs hit freight volumes and carriers · 2026 tariff exemption list · US tariff rates by country · Tariff news & advisories
Sources (verified Aug 25, 2026 — official Finance Canada release + 629-item product list revised Aug 26; FreightWaves, Truck News, The Guardian, Euronews, CTA, CNBC — research briefs t_8153278d Aug 25 + t_d98a84da Aug 31): Finance Canada — Canada announces targeted countermeasures and support (Aug 25, 2026) · Finance Canada — List of products subject to counter-tariffs, Sept 8, 2026 (629 items, revised Aug 26) · Gowling WLG — 874→629 revision detail · FreightWaves — Canada retaliates against US with tariffs of up to 50% (Aug 25, 2026) · Truck News — Canada retaliates against US tariffs as trucking braces for impact (Aug 25, 2026) · The Guardian — Canada announces retaliatory tariffs on wide range of US goods (Aug 25, 2026) · Euronews — Canada hits back with new counter-tariffs on US goods (Aug 25, 2026) · CTA — Canada announces countermeasures and support (Aug 25, 2026) · CNBC — Trump says U.S. will hike Canada auto tariffs to 50% (Aug 24, 2026) · Earlier verified sets (Aug 24 auto-tariff threat — CNN, CNBC, CP24; Aug 22 datapack t_89767bbd, 12 sources/6 official instruments; Aug 23 retaliation planning — Al Jazeera, India Today, CNBC): CNN — Trump is threatening 50% tariffs on Canadian cars (Aug 24, 2026) · CNBC — Trump says U.S. will hike Canada auto tariffs to 50% (Aug 24, 2026) · CP24 — 'We don't need Canada, they need us': Trump threatens 50% tariffs on all cars, trucks (Aug 24, 2026) · USTR — Greer statement (Jul 20, 2026) · White House Fact Sheet (Jul 20, 2026) · Proclamation 11048 (motor vehicles) · Proclamation 11046 (alcohol) · Proclamation 11047 (dairy) · Aug 18 suspension proclamation · Al Jazeera · Jerusalem Post / Reuters · ZeroHedge (rejected-offer rates) · NPR · CBC · The Guardian · Al Jazeera — Carney: Canada will enact retaliatory US tariffs starting September 8 · India Today — Carney says Canada at war with US over Trump's 50% tariffs · CNBC — US-Canada trade talks collapse, ushering in wave of new tariffs. This page is an advisory summary, not legal or customs advice — consult a licensed customs broker or trade counsel for your specific entries.