Tariff Update: Latest Changes to US, Canada and Mexico Import Duties
October 8, 2026 | ATN Trade & Finance
The North American trade landscape has shifted significantly since August, with new US tariffs on Canadian goods, Canadian counter-measures, escalating import bans, and stalled USMCA negotiations with both Canada and Mexico. Here is the current state of play — and the key dates still ahead.
US–Canada: The Section 338 Tariff Escalation
The most consequential change in North American trade this quarter is the activation of Section 338 of the Tariff Act of 1930 — a rarely-used authority — against Canadian imports. The timeline:
August 22, 2026: The US imposed 50% additional duties on approximately $20 billion (roughly 5%) of Canadian exports. Three product categories are covered under separate annexes:
- Alcoholic beverages (HTSUS 9903.03.12): beer, wine, spirits, and select wood and paper products
- Dairy (HTSUS 9903.03.13): dairy products, caseins, sugar-containing products, and nonalcoholic beverages
- Motor vehicles and other goods (HTSUS 9903.03.14): despite the name, this is the broadest category — covering agricultural and food products, leather goods, plywood and furniture, textiles, metals, industrial machinery, and certain printed circuit boards
Critical point for importers: USMCA preference does not exempt goods from these duties. The 50% tariff stacks on top of existing Section 232 duties on steel and aluminum. Exclusions are limited — passenger vehicles and their parts, semiconductors, and patented pharmaceutical articles are exempt, but the relief is narrower than many companies initially assumed.
September 8, 2026: Canada imposed matching 50% counter-tariffs on approximately $20 billion of US exports, including US steel, dairy, and agricultural equipment. Canada also suspended trade talks with Washington on August 21.
September 15, 2026: The US modified the Section 338 product lists — rock salt and cement were removed, while all-terrain vehicles (ATVs) and additional dairy products were added.
September 29, 2026: The dispute escalated further with outright import bans on certain Canadian alcoholic beverages, dairy products, and motorcycles over 800cc. The White House also directed the US Trade Representative and the General Services Administration to begin removing Canadian-origin products from GSA Multiple Award Schedules — a federal procurement vehicle covering more than $50 billion in annual government purchasing.
A Section 301 (10%) tariff has also been in effect since July 24, 2026, replacing the previously expired Section 122 measure. Combined with Section 232 duties on steel and aluminum that remain on the books, the total tariff burden on many Canadian goods is now layered across multiple authorities.
Where US–Canada Talks Stand
USMCA remains in force until 2036, but the US declined to confirm its extension on July 1, 2026 — the date that would have locked in another 16-year term — triggering annual joint reviews instead. Prime Minister Mark Carney has said Canada is ready to resume negotiations, but no formal talks are scheduled as of October 8. The political calendar is a complicating factor: US midterm elections on November 3 limit Washington's appetite for negotiated concessions.
US–Mexico: Stalled Fourth Round, Auto Sector at Risk
The US-Mexico track is quieter than Canada's but carries its own urgency for manufacturers. Mexican autos, steel, and aluminum remain subject to Section 232 tariffs, and Mexico has separately sought relief from two Section 301 actions covering forced labour and manufacturing overcapacity.
USMCA renegotiation talks have completed three rounds. A fourth round, planned for late September in Washington, was postponed with no replacement date confirmed — Mexican officials say it could happen in October. The gap between the two sides remains wide: the US is proposing a 50% US-made content requirement for vehicles to qualify for preferential tariff treatment, compared to the current 75% North American content rule. Mexico strongly opposes the shift, which would force significant supply chain restructuring for automakers on both sides of the border.
Key dates ahead:
- Mid-October: Mexican automotive industry wants concrete progress on a framework before investments shift
- November 3: US midterm elections — a deal before that date is increasingly unlikely
- Before year-end: USTR Greer has outlined a possible stage-one interim arrangement with both countries
- January 2027: Automotive sector tariff reviews; the US-China Phase One truce also expires January 10
What this means for importers and exporters: Any business with Canadian supply chains must audit its product classifications against the Section 338 annexes — the breadth of the "motor vehicles" category is widely misunderstood, and USMCA status does not provide protection. Companies importing Canadian dairy, alcohol, or industrial goods now face a 50%+ effective duty rate that was not priced into contracts written before August. For Mexico-facing supply chains, the uncertainty around USMCA content rules is the bigger risk: an investment in a Mexican facility today is a bet on a rules-of-origin framework that may shift substantially before year-end. Watch the fourth-round renegotiation date announcement — it will signal whether an interim deal is still possible before the November election.
Sources:
- New 50% Section 338 Duties on Select Canadian Products — C.H. Robinson
- Fact Sheet: President Trump Responds to Canada's Retaliation — White House
- What You Need to Know About the US–Canada Trade War — Avalara
- USMCA Negotiations 2026: US–Mexico Fourth Round and Tariff Outlook — Datasurfr
- 50 Percent Opening Bid: Section 338 Tariffs Amid USMCA Talks — Holland & Knight