The tariff, unveiled by US President Donald Trump on 20 July 2026, is set to come into effect on 19 August 2026.
A statement released by the White House stated that the decision was made in response to what it described as Canada’s “discriminatory treatment” of American products.
The new measure will apply to Canadian goods under Chapters 50–63 of the Harmonised Tariff Schedule, capturing knit and woven apparel as well as a host of other textile articles through a newly created tariff line.
Crucially, the planned 50% duty makes no exemptions for goods compliant with the Canada–United States–Mexico Agreement (CUSMA). This marks a departure from prior US tariff actions, which had excluded CUSMA-qualifying items.
Under the proclamation, only Canadian-origin products are affected, while Mexico is not subject to the new duty.
The tariff will be levied on goods entered for US consumption from 12:01 AM Eastern Time on 19 August 2026, using the entry date and not order or shipment date as the determining factor.
In a statement following the US announcement, Carney called the move the latest “unilateral breach” of CUSMA and signalled that Canada is prepared to respond robustly.
He described the situation as posing “threats to Canadian sovereignty,” an apparent reference to Trump’s repeated calls for Canada to become the 51st US state, according to a BBC report.
Carney said: “Canada believes in the benefits of free and fair trade, as evidenced by our new government signing more than 20 new economic and security partnerships. This trade dispute has raised costs for families, particularly in the US. Canada stands ready to engage intensively to address outstanding issues with the US to the mutual benefit of our citizens.
“In all circumstances, Canada will work relentlessly and take any measures necessary to build our strength at home and to support Canadian workers, farmers, businesses, and families.”
The White House noted that the 50% duty is the maximum permitted under Section 338 of the Tariff Act of 1930, which is being invoked for the first time.
However, officials left open the possibility of adjustments to the rate, product scope or timing before the August implementation.
