U.S. negotiators presented Canada with a proposal Tuesday that would lower some tariffs, though not by as much as Canadian officials wanted, Reuters reported, citing CBC.
Canada has not formally rejected the offer, and negotiations are continuing. Canada-U.S. Trade Minister Dominic LeBlanc remains in Washington, where he and Canada’s chief trade negotiator, Janice Charette, are scheduled to meet U.S. Trade Representative Jamieson Greer again Thursday afternoon.
Ottawa may also have room to make concessions. Reuters reported last week that Canada could offer movement on counter-tariffs on U.S. automobiles, dairy quota allocations and efforts to get American alcohol back into Canadian stores in return for tariff relief. Canada is also seeking relief from existing U.S. tariffs, including those on steel and aluminum.
The alcohol issue isn’t entirely Ottawa’s to resolve because provinces and territories control alcohol distribution, limiting what the federal government can deliver on its own.
For affected Canadian exporters, the outcome of those talks could determine how much their U.S. costs change next week.
The 50% tariffs are already scheduled
On July 20, President Donald Trump signed three proclamations under Section 338 of the Tariff Act of 1930.
Each imposes an additional 50% tariff on a different list of Canadian products. The measures take effect at 12:01 a.m. Eastern Time on August 19, 2026, unless they are reduced, modified, or terminated. We broke down the original tariff package, affected products, and preparation steps in our earlier guide to the new 50% U.S. tariffs on Canadian products.
The U.S. Trade Representative says the affected goods account for nearly US$20 billion in Canadian imports, or about 5.2% of the US$383 billion in goods the U.S. imported from Canada in 2025.
This isn’t a 50% tariff on everything Canada sells to the U.S.
But products on the covered lists lose a protection many Canadian exporters have relied on:
CUSMA compliance doesn’t exempt them.
The White House says the new Section 338 tariffs apply to covered products even when they qualify under the Canada-United States-Mexico Agreement. Energy, potash, products already subject to Section 232 tariffs and certain other goods, including fish and critical minerals, are excluded.
The affected products span several industries. The White House gives examples ranging from wine and hockey sticks to cement. CFIB identifies affected categories including machinery and manufacturing components, wood and building products, plastics and packaging, food and agriculture, furniture, apparel and sporting goods.
35% of affected exporters expect revenue to fall by at least half
CFIB’s latest survey gives a clearer picture of what a 50% tariff could mean for smaller exporters.
Among 405 Canadian exporters to the U.S. that answered whether they sell products on the proposed tariff lists, 40% said yes.
CFIB then asked affected exporters how the tariffs would change their revenue over the next 12 months. Among the 161 businesses that answered:
77% expect revenue to decline.
35% expect revenue to fall by at least half.
Only 2% expect no impact.
In another part of the survey, 78% of exporters agreed that a 50% tariff would make their products uncompetitive in the U.S., while 75% said it would push them to take further action to reduce their dependence on that market.
The tariff itself is generally paid to U.S. Customs by the importer rather than directly by the Canadian exporter. But that doesn’t insulate the Canadian seller. A U.S. customer facing a much higher landed cost can demand a lower price, cut orders or look for another supplier.
For an exporter operating on tight margins, the business impact can arrive even if the tariff bill doesn’t.
More Canadian SMEs are selling outside the U.S.
The U.S. is still Canada’s dominant export market.
Statistics Canada data analyzed by CFIB shows that nearly 85% of Canadian SMEs that export goods sell into the United States.
But the latest numbers also point to gradual diversification.
Between 2024 and 2025, the number of Canadian SMEs exporting goods to the U.S. fell 1.4%. Over the same period, the number exporting to non-U.S. markets rose 6.6%.
One year of data doesn’t prove a permanent shift away from the American market.
That’s difficult to reverse quickly. Tariffs can disappear with a signature. New customers, distribution channels and supplier relationships take much longer to build.
What affected businesses can check before August 19
Businesses selling physical products into the U.S. don’t need to predict how the negotiations will end. They can work from the measures currently scheduled.
First, determine whether each exported product falls under one of the affected tariff classifications. Don’t assume CUSMA status settles the question.
Then run the economics with the additional duty included.
For some companies, that means reviewing pricing with U.S. customers. Others may need to check contracts, shipment timing, margins or alternative markets.
A customs broker or qualified trade professional can also help confirm how a specific product is classified and whether the new tariff applies.
The goal isn’t to make a major business change because negotiations might fail. It’s to know what your options are before the deadline arrives.
Plan for August 19, then adjust if the deal changes
Canada and the U.S. are still talking. LeBlanc and Greer have another meeting scheduled Thursday, and Washington’s latest proposal shows there is still room for the terms to change.
But the 50% tariffs don’t require another announcement to take effect. They are already scheduled for August 19.
Affected businesses can plan around that date now and change course if Ottawa and Washington reach a better agreement.
Waiting for the negotiations to produce certainty leaves less time to respond if they don’t.
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