New 50 percent tariffs on nearly $20 billion worth of Canadian imports took effect August 22 after the United States and Canada failed to reach a last-minute trade agreement. The tariffs followed several days of intensive negotiations that appeared to be moving toward an agreement, with both governments reporting substantial progress and the United States delaying implementation for three days to allow talks to continue. Negotiations ultimately broke down late Friday after the two sides were unable to resolve remaining differences, including over steel, aluminum, autos and softwood lumber.

The new tariffs extend across a broad range of goods, including building materials, alcohol, dairy products and clothing, among others. In the construction sector, covered products include cement, plywood, veneered panels, laminated veneer lumber, particleboard, fiberboard, wood moldings, doors and frames, fencing components and other wood products. USMCA-compliant goods included on the tariff lists remain subject to the additional duty, a departure from the 2025 Canada tariffs, which were amended to exempt goods qualifying for USMCA preference. Canadian softwood lumber and certain other wood products already covered by Section 232 tariffs are excluded, meaning the new 50 percent Section 338 duty does not stack on top of the existing Section 232 tariff.

Canada has announced it will respond with dollar-for-dollar retaliatory tariffs on U.S. exports beginning September 8. The Canadian government said the measures will be concentrated in sectors including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics, with a final list of covered products expected before implementation. Canada has also suspended the latest round of negotiations and recalled its negotiating team to Ottawa.

Earlier today, President Trump announced that tariffs on additional Canadian products would increase to 50 percent beginning January 1, including cars, trucks, automotive parts and steel. NLBMDA will continue closely monitoring implementation of the new tariffs, Canada’s retaliatory measures and any renewed efforts to reach a U.S.-Canada trade agreement.

Questions? Please contact NLBMDA Government Affairs Coordinator Matthew Delaney at mdelaney@dealer.org.