Over the past week, there have been significant changes in Canada–U.S. tariffs.
Please find below a summary of various issues, including links to more in-depth articles that we have posted on www.caf-fcv.ca - in the CAF member-only news section. You must login to view these articles. If you have trouble logging in, contact us.
Overview
-
U.S. tariffs came into force August 24, 2026.
-
Canada's matching retaliatory tariffs took effect September 8, 2026.
-
The scope of the U.S. and Canadian tariffs is the same for apparel. However, the U.S. has placed tariffs on a range of Canadian textiles (yarns/fibres), which were not matched by Canada.
-
The U.S. retaliated when the Canadian tariffs were implemented on September 8th, but that retaliation was quite measured and moderate.
-
Both Canada and the United States have removed certain products from the lists of retaliatory tariffs, based on industry input. CAF is working with other organizations in Canada and the US to press for apparel to be exempt from these tariffs.
-
We continue to support a resumption of talks and a negotiated resolution.
Tariffs/Retaliatory Tariffs
- The week began with Canada implementing surtaxes/tariffs on U.S. products equivalent to the Section 338 tariffs imposed by the United States in August. Canada's 50% surtax covers apparel made in the United States.
- The U.S. maintains duties on both apparel and a wide range of textiles (yarns/fibres).
- Canada’s tariffs do not include textiles (yarns, fabrics); carpets are subject to the tariffs.
- U.S. retaliation was less significant than might have been the case.
- Some of the retaliatory measures take effect at the end of the month, setting up another possible target date for re-launched negotiations.
- More details on the US actions is available HERE
CAF Actions
-
The Canadian Apparel Federation and other organizations in Canada and the United States are pushing for a resumption of negotiations. We have worked with our U.S. sister association, the AAFA, to request that the Canadian and U.S. governments exempt apparel from these trade actions.
-
Our letter to the US and Canadian governments highlights, in simple terms, that our products are entirely unrelated to the sectors that are the root of the disagreement between the two countries, and there is no reasonable basis for continuing with tariffs on apparel and textile products.
TPL Coverage
-
In late August it came to our attention that some companies were of the view that products subject to tariff preference levels (TPL) were exempt from these tariffs. This is not correct.
-
In 2025, some of the reciprocal tariffs imposed by the US on Canada did inadvertently exempt TPL goods. This was only relevant for a few days in March 2025.
-
However, it is very clear (regrettably) that these products are covered by the 50% tariffs currently in place, and we have provided clear references in this article.
Origin Verification Audits
-
U.S. Customs and Border Protection (CBP) is actively using Article 6.6 of the USMCA (CUSMA) to conduct site visits—sometimes called "jump visits"—at the premises of Canadian textile and apparel exporters claiming USMCA preferential tariff treatment.
-
Typically, U.S. Customs visits factories unannounced (as they are allowed to do), so exporting companies must be prepared.
-
CAF is aware of at least one member that has received a site visit of this kind. We encourage companies to read this overview
Government Support Programs
-
Many programs have been set up by the federal government and, in some cases, individual provinces. These programs focus on various wage support schemes and trade diversification measures. Federal programs are listed on the Canada Strong web page.
-
The main feedback that we have received is that these programs don't address the central problem: the financial burden of 50% tariffs that are not easily passed on to U.S. customers.
-
As a longer-term priority, it is clearly prudent for us to diversify our export markets, but it remains the case that most Canadian companies build products for the North American market. It is also the case that the Canadian market cannot absorb many of the goods originally destined for the U.S.
-
The priority is to retain U.S. customers wherever possible while looking at other markets.
-
One program, the RTRI, has been updated to include "liquidity assistance." The program may help small to medium-sized companies offset tariff liabilities. This assistance is in the form of non-repayable loans.
-
We have posted an article on the RTRI program HERE
We continue to seek your feedback about these programs, the impact of U.S. tariffs, and related issues.
Timeline of tariffs
BLG has prepared a fairly detailed summary of the various retaliatory tariffs. It is available HERE
CAF Contact
Bob Kirke
Executive Director
Canadian Apparel Federation
E: bkirke@apparel.ca
T: 613.231.3220, ext. 224
