What to know about new proposed tariffs on Canadian goods

Tariffs // July 24, 2026 What to know about new proposed tariffs on Canadian goods By Gabriela Barkho Ivy Liu A fresh round of surprise Trump Administration tariffs was announced this week. This time, they affect goods made in U. S. -neighboring Canada.

The announcement indicates that tariffed categories will include Canada’s auto, dairy, alcohol, fishing rods and even wigs. Companies anticipated to be affected range from dairy producer Agropur to plant-based food brand Daiya and even Halo Top, thanks to some of its products. Meanwhile, products like oil and natural gas flowing from Canada will be exempt.

While last year’s tariff rounds were ruled unconstitutional, this time the Trump Administration is using Section 338 of the Tariff Act of 1930 as a response to so-called discriminatory Canadian trade practices against the U. S. The tariffs are scheduled to take effect on Aug.

19, but negotiations are expected in the coming weeks that could alter the final rates. The good news is that, for now, the included product categories appear to be limited enough for many consumer brands to be protected from new tariffs.

Moreover, it remains to be seen whether these tariffs will be legally challenged, as Section 338 has never been used by another president to impose tariffs until now.

Jackson Wood, director of industry strategy for global trade intelligence at Ontario-based Descartes, which works closely with importers navigating tariffs, said it’s important to contextualize the new tariffs in the broader United States-Canada-Mexico (USMCA) trade negotiation perspective.

The USMCA free-trade agreement between the three countries, which replaced NAFTA in 2020, expired on July 1. “So we now have rolling one-year periods where some form of USMCA is going to remain in place,” Wood said. That opens up gaps for the U. S. government to announce fresh tariff rates that target specific industries.

Section 338 of this trade law gives a sitting president the power to impose tariffs of up to 50% on countries that discriminate against U. S. -made goods. In this case, Wood said, this refers to Canadian retailers and consumers boycotting American goods after U. S. tariffs were imposed last year. Retailers and brands may be worried at first glance.

However, Wood said that the 50% rate sounds more concerning than the reality. “The types of products that have been targeted this time around represent just about $20 billion of annual Canadian exports,” Wood said. Canada is currently the U. S.’ second-largest trading partner.

As such, the exemptions limit this round of tariffs’ impact to about 5% of Canadian imports to the United States, which represented $382 billion in 2025. “Twenty billion dollars is a lot of money, but not in the context of a trading relationship that’s in the hundreds of billions of dollars annually,” Wood said.

Still, Wood said, unfortunately these tariffs would disproportionately affect small and medium-sized businesses that happen to fall in the targeted categories. That includes, for example, an independent spirits brand or cheese producer. It makes sense, Wood said, as “the dairy industry in Canada has long been a sore spot for the U. S.

, particularly its powerful dairy farming community,” Wood said. So far, a number of products appear to be immune from the proposed tariffs, even those that use listed categories in their finished goods. Toronto-based frozen pizza brand Porta, which sells at Whole Foods Market and Sprouts in the U. S.

, will not be hit with these tariffs if they’re ultimately implemented. A representative from the brand said the company does not consider its finished products, which include dairy ingredients, to be part of the categories listed in the initial announcement.

Joseph Firrincieli, sales manager at freight forwarding and logistics firm OEC Group New York, told Modern Retail that after the onslaught of tariff announcements last year, many importers “have become kind of numb” to the current Administration’s surprise tariff policies. “It’s like, ‘Oh here we go again,’” he said.

“These tariffs will have an impact if they actually end up going through and everything is deemed constitutional down the road,” Firrincieli said. However, Firrincieli said that, so far, his Canadian importer customers have not made any modifications to their upcoming shipments from up north.

“There are a lot of factors that you have to take into consideration before jumping around and changing your supply chain,” Firrincieli said. As such, he advises a “wait and see” approach to suppliers that may potentially be impacted by new tariffs.

“Different countries are being targeted by this administration with tariffs, so it’s hard to tell where things will eventually land,” Firrincieli said. Indeed, Wood expects Canada and the U. S. to negotiate over the next few weeks, which could alter the 50% tariff rate the Trump Admini