US tariffs on Canada: what ecommerce brands need to know

As of August 22, 2026, the United States charges an additional 50% duty on a wide list of Canadian-made goods, under Section 338 of the Tariff Act of 1930. The duty is decided by where a product is made, not where it ships from, and CUSMA does not exempt it. For ecommerce brands, US landed costs on affected items rose overnight.

Last updated: August 24, 2026.

What changed on August 22, 2026

On August 22, 2026, at 12:01 a.m. ET, the US began applying an additional 50% duty on roughly US$20 billion of Canadian-made goods, after US-Canada trade talks collapsed the night before. The duties were first set for August 19, suspended three days for negotiation, and took effect when no deal was reached. (Sources: White & Case; White House proclamation)

• The 50% is on top of any duty already applied to the product.
• It was imposed under Section 338 of the Tariff Act of 1930, which lets the President add duties of up to 50% on a country found to discriminate against US commerce. This is the first use of Section 338. (Source: White & Case)
• Three proclamations underpin it, covering motor vehicles, alcoholic beverages, and dairy, but the operative product lists reach further (see below). (Source: White House proclamations)

It is about where goods are made, not where they ship from

This is the point most coverage skips, and the one that decides whether a brand is exposed. The duty attaches to country of origin (where the product was manufactured), not the country it ships from.

• Made in Canada, shipped from a UK or EU warehouse into the US: pays the 50%.
• Made in Vietnam or China, shipped from a Canadian warehouse into the US: does not pay it.

If a brand manufactures anything in Canada and sells into the US, it should assume exposure until it has checked its product classifications (HS codes) against the official lists.

Which products are affected

The headlines say dairy, alcohol, and motor vehicles. The published product lists are broader, and include categories that matter directly to consumer ecommerce:

• Furniture and home goods
• Apparel, footwear, and luggage
• Cosmetics and fragrances
• Jewellery
• Toys and sporting goods
• Building materials, plastics, and packaging
• Electronics and machinery inputs

A brand cannot assume it is clear just because it does not sell dairy, alcohol, or cars. The determinant is the HS code and country of origin, not the retail category. Check your products against the official affected-product lists. (Source: White House)

CUSMA does not exempt these duties

Goods that meet CUSMA (USMCA) rules of origin normally move duty-free between the US and Canada. These Section 338 duties override that. There is no CUSMA exemption or rule-of-origin relief for affected products. The goods on these lists are about 5% of Canadian exports to the US, roughly US$20 billion, and they get no relief. (Source: USTR; White House)

Goods already in transit are not protected

The duty applies based on the effective date, not the order date. Stock that shipped before August 22 but entered the US after it is still exposed. Brands with inventory in motion should reconcile what has actually cleared customs, rather than assume pre-deadline orders are safe.

Canada's retaliation lands September 8

Canada has announced dollar-for-dollar counter-tariffs, effective September 8, 2026, on US-made goods including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Any brand shipping US-made goods into Canada should treat this as the same problem in reverse and check the Canadian list before September 8. (Source: Prime Minister of Canada)

What ecommerce brands should do now

1. Check country of origin per SKU, not per brand. Origin, not shipping location, decides exposure.
2. Map your catalogue to the official product lists by HS code. If any Canadian-origin SKU appears, its US landed cost has already changed.
3. Confirm your checkout is charging the new landed cost, so the shopper pays the correct total and nothing arrives as a surprise customs bill.
4. Reconcile in-transit inventory against the August 22 effective date.
5. Get ahead of September 8 if you ship US-made goods into Canada.

How Swap handles cross-border duty changes

Swap Global calculates and guarantees Total Landed Cost - product, duties, and taxes - at checkout, using each item's country of origin and classification. When a duty rate changes, the calculation reflects it, so shoppers pay one final price and brands are not left under-charging or absorbing a surprise cost. Swap Global supports duty-inclusive pricing, DDP shipping from a brand's own warehouses, and automated customs documentation, and the brand remains merchant of record throughout. 1,000+ brands run on Swap.

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