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U.S. tariffs on more Canadian imports take effect under Section 338
The new 50% duties target products that account for about 5% of Canadian exports to the U.S., and the impact is concentrated in Quebec, British Columbia, and Ontario.
New U.S. Section 338 tariffs have officially taken effect on an additional subset of imports from Canada after no last minute deal emerged to avoid the measures, Action Forex reports.
The duties apply a 50% tariff rate on U.S. imports covering about 5% of Canadian exports to the United States, adding to existing tariffs that have already been imposed on products including steel and aluminum, lumber, and motor vehicles.
Action Forex estimates the Canadian value added tied to the newly tariffed U.S. imports totals roughly 0.4% of Canadian GDP and jobs, while CUSMA exemptions are expected to keep more than 80% of exports duty free.
The outlet also notes that impacted sectors include plastic products, electrical machinery, furniture, and wood products, with the regional effect concentrated in Quebec, British Columbia, and Ontario. It adds that Canada’s average effective tariff rate would rise to around 6% from around 3%, though actual traded volumes may fall because the purchases would become prohibitively expensive.