Canada's retaliatory tariffs hit $27.6B of US goods Sept. 8

Canada moved to impose sweeping counter-tariffs on approximately $27.6 billion worth of American goods on Tuesday, after trade negotiations between Ottawa and Washington collapsed late Friday and the US held firm on a broad 50-per-cent duty regime targeting Canadian exports. The new Canadian measures, covering roughly 700 product lines across steel, electronics, appliances, dairy, fish and seafood, and agricultural equipment, take effect at 12:01 a.m. on Tuesday, Sept. 8, 2026.

Finance Minister François-Philippe Champagne, Industry Minister Mélanie Joly, Jobs Minister Patty Hajdu, and Artificial Intelligence and Digital Innovation Minister Evan Solomon announced the package in Ottawa on Tuesday morning, confirming a "dollar for dollar, rate for rate" response to the United States' Section 338 and Section 232 tariff actions. Canadian counter-tariffs will apply at three rates – 15, 25, and 50 per cent – with each product's rate matching the corresponding American duty on the same goods.

"When the United States asked too much and offered too little, we chose to stand up for Canadians. Our dollar-for-dollar, rate for rate counter-tariffs as well as a multi-billion dollar support package will protect workers, farmers, families, and businesses as we build a stronger, more resilient, and more diversified Canadian economy,” said François-Philippe Champagne, Minister of Finance and National Revenue at a press conference on Tuesday.

Supply-chain uncertainty

The tariffs arrive at a moment of acute supply-chain uncertainty for Canadian businesses in manufacturing, food processing, construction, and technology. Goods now subject to a 50-per-cent counter-tariff include steel and aluminum products - previously taxed at 25 per cent - as well as furniture, clothing, and apparel. At the 25-per-cent level sit household appliances, dairy products such as cheese, fish and seafood, and certain steel and aluminum derivative products. Existing counter-tariffs on automobiles and auto parts remain in place, and Washington has threatened to raise those duties on Canadian vehicles and auto components to 50 per cent beginning Jan. 1, 2027.

For businesses in sectors such as manufacturing, logistics, and procurement, the practical implications are immediate: rising input costs across affected product categories will pressure margins, accelerate sourcing reviews, and in some cases force workforce decisions. Electronics and agricultural equipment – both covered under the new measures – feed directly into the operational cost base of businesses far removed from those industries at first glance, including retailers and service-sector employers who procure US-made devices and machinery.

For businesses in sectors such as manufacturing, logistics, and procurement, the practical implications are immediate: rising input costs across affected product categories will pressure margins, accelerate sourcing reviews, and in some cases force workforce decisions.

The scale of the disruption for Canadian businesses is already visible in survey data, according to Simon Gaudreault, Vice-President of Research and Chief Economist at the Canadian Federation of Independent Business (CFIB) in Ottawa. In a CFIB survey of more than 1,800 business owners conducted in recent weeks, 40 per cent of respondents that export to the United States said they would be impacted by the latest round of 50-per-cent US tariffs — and of that group, a full third expect revenues to fall by half or more.

"We're talking about a major hit to some business sales," Gaudreault says. "Certain businesses in Canada are entering a valley of death right now."

Despite that pressure, Gaudreault believes most employers will resist cutting their workforce as a first response. Labour shortages haven’t eased and losing trained people now would compound future risk, he says. "The last thing that they probably want to do is to let go of some of the key talent that they've had a hard time recruiting and training in the first place," he says. "They will want to keep those staff for as long as possible."

Electronics and agricultural equipment, for example – both covered under the new measures – feed directly into the operational cost base of businesses far removed from those industries at first glance, including retailers and service-sector employers who procure US-made devices and machinery.

A $7.5 billion package for workers and employers

Alongside the counter-tariffs, the federal government announced a $7.5 billion package of new and enhanced supports, building on nearly $25 billion in trade-related assistance provided since the original round of US tariffs began in 2025, according to the Department of Finance Canada's news release. The package carries significant implications for HR professionals managing workforces in tariff-exposed industries.

The most operationally significant measure for people managers is a new suite of Rapid Response Supports for Workers and Employers, totalling $3.5 billion. This stream includes extended and additional Employment Insurance (EI) temporary flexibilities, allowing affected workers to access income support more readily. It also introduces a new Worker Retention and Retraining Program (WRRP), designed to help employers retain their workforce through disruption while investing in skills transition. The WRRP represents a funded alternative to separation — one worth factoring into workforce planning immediately.

Gaudreault welcomes the speed of the government's response but has concerns about delivery – particularly for the smallest employers. Data from an earlier round of relief programs administered through Canada's regional development agencies in 2025 show that only 13 per cent of businesses reported being aware of the programs and just one per cent actually accessed them, he says. The eligibility criteria at the time – which included minimum thresholds of $2 million in annual sales and at least 10 employees, with a focus on the manufacturing sector – excluded the vast majority of Canadian small businesses, many of whom face dire circumstances under the latest US tariffs.

"Half of all employer businesses in this country have less than five employees and will have less than $2 million in revenue," Gaudreault says. "So they will widely miss the mark, unfortunately."

CFIB urges broader tax relief

The CFIB has urged the federal government to supplement program-based support with broader tax relief — specifically, a reduction in the federal small business tax rate from its current nine per cent to six per cent, according to Gaudreault. He says that CFIB’s own data shows that when small business taxes are cut, owners don’t pocket the savings as dividends.

"The business owner will primarily reallocate this money to their HR budget," he says. "They will increase compensation, or in this case, probably use that to retain some of their key staff."

With counter-tariffs now adding pressure on the import side, such a cut would give employers meaningful room to hold their teams together without waiting on program applications, adds Gaudreault.

Where the government does offer grant-based support for frontline businesses impacted by the US tariffs or the Canadian counter-tariffs,, Gaudreault says it should be in grants, not loans. "The past few years have been very eventful in the small business sector — with the pandemic, supply chain disruption, the hyperinflation episode, and now the trade war," he says. "Their capacity to take on more loans is limited."

Additional measures include a $1.5 billion investment through the Regional Tariff Response Initiative, delivered through Canada's regional development agencies, providing liquidity support for small and medium-sized enterprises. A further $2 billion Canada Strong Diversification Fund will support businesses with shovel-ready capital projects. A new $500 million liquidity stream under the Business Development Bank of Canada's (BDC) Pivot to Grow program is also available, with the minimum revenue threshold for BDC tariff programs now lowered to $1 million — a threshold change that opens access to a broader range of Canadian employers.

"In a more uncertain world, Canada will continue to invest in our greatest strengths: our workers, our businesses, and our capacity to compete," said Mélanie Joly, Minister of Industry, at the press conference. "Today's new measures will protect jobs, strengthen the industries that drive our economy, and secure the supply chains that underpin our prosperity."

What businesses — and HR leaders — can no longer assume

For some employers, reduced hours, hiring freezes, and layoffs are already being contemplated, while for others, the risk is more permanent, says Gaudreault. "Certain businesses are facing potential permanent closure if this thing goes on for more than a short period of time," he says.

On the broader question of the counter-tariff strategy, Gaudreault acknowledges the political logic while noting the economic reality that import duties imposed by Canada are ultimately borne by Canadian businesses and consumers. "There are no real winners in a trade war," he says, adding that the medium-term priority must be finding a negotiated path back to a deal that works for both sides.

He also pointed to a structural lesson the current crisis has surfaced: Canada's interprovincial trade barriers remain unresolved, leaving domestic market potential on the table even as businesses look to pivot away from US customers. CFIB data shows that many members are now actively exploring sales within Canada and in other markets, where Canada holds free trade agreements with more than 15 countries.

The counter-tariffs will remain in place, according to the Department of Finance, until the US removes its tariffs on Canadian goods. No timeline for a return to negotiations has been announced.

Canada's counter-tariffs on US goods effective Sept. 8

The table below summarizes key product categories targeted by Canada's retaliatory measures, grouped by sector and applicable tariff rate. The complete list of tariff items at the Harmonized System (HS) code level is published by the Department of Finance Canada at canada.ca. Rates of 15, 25, and 50 per cent mirror the corresponding US duty on the same goods. Tariffs apply only to goods originating in the United States. Existing counter-tariffs on autos remain separately in force.

Source: Department of Finance Canada