Trade wars used to feel like something out of a history book. Not anymore. If you’ve looked at the price of a new truck or tried to source structural steel lately, you’ve probably felt the sting of the current border spat. Honestly, the situation between Washington and Ottawa has moved so fast over the last year that most people are still quoting rules that expired months ago.
It's messy.
Right now, we are sitting in a strange middle ground. In late 2025, things looked like they were heading toward a total economic divorce. However, as of January 2026, there’s a lopsided peace. Canada actually dropped a huge chunk of its retaliatory tariffs back in September 2025, but that doesn't mean the "trade war" is over. Far from it. While a lot of consumer goods like peanut butter and orange juice are crossing the border without extra fees again, the heavy hitters—steel, aluminum, and cars—are still locked in a high-stakes standoff.
What Tariffs Are Imposed on the US From Canada Right Now?
To understand what’s happening, you have to look at the "tit-for-tat" history of the last twelve months. When the U.S. administration ramped up tariffs on Canadian goods using Section 232 (that's the national security clause), Canada didn't just sit there. They fired back with a massive list of surtaxes.
Basically, the Canadian government under Prime Minister Mark Carney has maintained a 25% tariff on a specific list of U.S. products. This isn't a blanket tax on everything. It’s surgical.
The Heavy Hitters: Steel and Aluminum
The most significant wall is the 25% surtax on U.S. steel and aluminum. This has been the sticking point for nearly a year. Canada keeps these in place because the U.S. is still taxing Canadian metal.
It’s a massive list. We’re talking about:
- Semi-finished products of iron or non-alloy steel.
- Flat-rolled products (the stuff used in everything from appliances to ductwork).
- Wire, rods, and tubes.
- Specific aluminum alloys and ingots.
If you’re a U.S. manufacturer trying to sell these specific raw materials to a Canadian factory, you’re likely eating that 25% cost or losing the contract to a local supplier. Interestingly, the Canadian government has been granting "remissions" or exceptions for certain industries. For instance, if you’re importing U.S. steel to build a car in Ontario, you might get a pass until June 30, 2026. But for general construction or food packaging? That window is slamming shut on January 31, 2026.
The Automotive Standoff
Cars are where things get really weird. Canada currently imposes a 25% tariff on U.S.-made vehicles that don't meet the strict "CUSMA" (Canada-United States-Mexico Agreement) requirements.
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Essentially, if a car isn't "North American enough" in its parts and labor, it gets hit. This was a direct response to the U.S. putting a 25% tariff on all trucks and cars not built on American soil. It’s a game of chicken where the only losers are the dealerships and the people trying to buy a mid-sized SUV without a five-figure markup.
Why Some Tariffs Disappeared (And Why It Matters)
You might remember headlines about 25% tariffs on $30 billion worth of American goods like coffee, beer, and motorcycles. If you’re looking for those today, you won’t find them.
On September 1, 2025, Canada made a massive strategic move. They removed the 25% surtax on roughly $44 billion worth of U.S. imports. This included the "Phase 1" and "Phase 2" lists that targeted everything from Kentucky bourbon to household appliances.
Why did they do it?
Because the U.S. agreed to keep most Canadian goods "CUSMA-compliant," meaning they enter the U.S. duty-free. Canada essentially said, "If you don't tax our general exports, we won't tax yours." It was an attempt to cool the room before the big USMCA review coming up in July 2026.
The 2026 "Steel Derivative" Pivot
Just when things seemed to be calming down, Canada threw a new curveball. As of December 26, 2025, there is a new 25% global tariff on "steel-derivative" products.
What does that even mean?
It means things made out of steel, not just the raw metal. We're talking:
- Screws, bolts, and washers.
- Cables and bridge sections.
- Wind towers.
This hits U.S. exporters hard because these are the finished goods that smaller businesses rely on. Canada is also tightening its "Buy Canadian" policies for any federal contract over $25 million. If you’re a U.S. company bidding on a Canadian bridge project, you basically have to prove you’re using Canadian steel, or you’re out of the running.
The USMCA Review: The Elephant in the Room
Everything we are seeing right now is just the preamble for July 1, 2026. That is the "sunset review" date for the trade agreement formerly known as NAFTA.
All three countries—the U.S., Canada, and Mexico—have to sit down and decide if they want to keep the deal going for another 16 years. If they don't agree, the deal doesn't die instantly, but it starts a 10-year countdown to termination.
The U.S. is already signaling they want to squeeze Canada on "supply management" (that’s dairy and poultry) and digital services taxes. Canada is using its remaining steel and auto tariffs as leverage. It’s a high-stakes poker game, and the tariffs are the chips on the table.
Actionable Insights for Businesses and Consumers
If you are dealing with cross-border trade between the U.S. and Canada in 2026, the "wait and see" approach is a recipe for bankruptcy.
- Audit Your HS Codes: The difference between a "steel product" (taxed) and a "finished machine" (not taxed) is often just a specific Harmonized System code. If you haven't reviewed your classifications since the 2025 shifts, you might be overpaying.
- Watch the Remission Deadlines: If you rely on U.S. steel for manufacturing in Canada, remember that the "general" remission expires on January 31, 2026. After that, your input costs jump 25% overnight unless you’re in the auto or aerospace sectors.
- Leverage CUSMA Certificates: The U.S. is currently exempting about 89% of Canadian imports from its broad tariffs if they can prove they are CUSMA-compliant. Documentation is your best friend right now.
- Diversify Supply Chains: If you’re a U.S. builder, look at Canadian lumber (which currently faces a total tariff of over 35% in some cases) and compare it against domestic or other international sources. The "reciprocal" nature of these taxes means prices aren't going down anytime soon.
The border isn't closed, but it's definitely more expensive than it used to be. Whether you're buying a Ford F-150 or 10,000 tons of structural I-beams, the "invisible" wall of tariffs is very much a part of the 2026 economy. Keep a close eye on the July USMCA review—that’s when we’ll find out if these "temporary" taxes become a permanent fixture of North American life.