Trade Update Sept. - U.S. Adjusts Section 338 Tariffs on Canada

In response to Canada's September 8 retaliatory tariffs on approximately $20 billion of U.S. exports, U.S. President Trump signed five new proclamations targeting Canadian goods on the same date. The new measures introduce targeted restrictions across various sectors. Apparel and textile products were not impacted by these proclamations.

Overall, the US response was fairly measured and may suggest that there is room for the two countries to end the back-and-forth tariff escalation and return to the negotiating table.

US retaliation

The US created three new import bans on select Canadian alcohol, dairy, and motor vehicle products which take effect September 29, 2026.

Two proclamations revise the existing 50% tariff lists for alcohol and motor vehicles, adding and removing specific product lines effective September 15, 2026.

 Why the impact is limited

• List revisions add ~110 product lines (~US$1.845B in 2025 trade) while removing ~10 lines (~US$1.739B), including Portland cement, switchboards, and lead—resulting in a near-zero net trade effect.
• Import bans affect under US$1 billion in trade (~0.25% of Canadian exports to the U.S.)
• The alcohol ban applies solely to packaged products; bulk alcohol shipments for U.S. packaging remain permitted.
• Newly banned items were already subject to the 50% duty, converting tariff restrictions into exclusions without adding new trade exposure. 

Bottom line

The measures largely offset each other in trade value, representing a measured response.  For CAF members, this suggests we may soon reach a pivot point to de-escalate and reopen broader bilateral negotiations.

CAF, together with our sister association in the US (the AAFA), has asked both governments to exempt apparel from these tariffs and return to the bargaining table.

For more details on this issue, contact: CAF Executive Director, Bob Kirke bkirke@apparel.ca

Sources

• White House Fact Sheet, September 8, 2026: https://www.whitehouse.gov/fact-sheets/2026/09/fact-sheet-president-donald-j-trump-responds-to-canadas-retaliation/
• White House Proclamations Archive: https://www.whitehouse.gov/presidential-actions/proclamations/