US Tariffs on Canada: What Small Sellers Pay Now
US tariffs on Canada as of November 2026 for small online sellers: Section 301, the 50% Section 338 list, CUSMA, Canada Post vs couriers and what to do.
TL;DR: as of 1 November 2026, a parcel you sell to a US customer can face up to four layers of US duty: the product’s normal (MFN) duty rate, a 10% Section 301 tariff, a 50% Section 338 tariff if the product is on the Canada list, and Section 232 tariffs on metals, lumber and some furniture. Goods that qualify under CUSMA escape the normal duty and the Section 301 tariff, but not Section 338. And because the US$800 de minimis is gone, small parcels pay too. US rules on Canada have changed five times this year, so check before every big shipment.
| Tariff layer | Rate | CUSMA-qualifying goods exempt? | What it covers |
|---|---|---|---|
| Normal US duty (MFN) | Depends on the product | Yes | Almost everything, by HTS code |
| Section 301 | 10% | Generally yes, if entered under CUSMA | Most goods from most countries, since 24 July 2026 |
| Section 338 (Canada only) | 50% | No | About US$20 billion of listed Canadian goods, since 22 August 2026 |
| Section 232 | 10% to 50% | Mostly no | Steel, aluminium, copper and their products, lumber, upholstered furniture, kitchen cabinets, autos |
| De minimis | Gone | n/a | Parcels under US$800 no longer enter duty-free |
This post is for small Canadian businesses selling online to US customers through Shopify, WooCommerce, BigCommerce or Etsy. For the step-by-step on shipping, paperwork and DDP, see selling to US customers from Canada.
How we got here
| Date | What changed |
|---|---|
| 29 August 2025 | US$800 de minimis suspended for commercial shipments from every country |
| 20 February 2026 | US Supreme Court rules IEEPA doesn’t allow tariffs. The 35% IEEPA tariff on non-CUSMA Canadian goods ends on 24 February |
| 24 February 2026 | A 10% Section 122 surcharge replaces it, on Canadian goods that don’t qualify under CUSMA |
| 24 July 2026 | Section 122 expires. A 10% Section 301 tariff on most goods from most countries, including Canada, takes over |
| 22 August 2026 | 50% Section 338 tariffs start on a list of Canadian goods, with no CUSMA exemption |
| 15 September and 30 October 2026 | Section 338 list revised, and Section 338 now stacks on Section 232 for most goods |
Canada answered on 8 September 2026 with counter-tariffs of 15%, 25% and 50% on US goods. That matters if you buy supplies or stock from the US. The One Big Beautiful Bill Act repeals de minimis for commercial shipments by law from 1 July 2027, so it isn’t coming back.
The four layers, in plain English
1. Normal duty (MFN)
Every product has a US tariff code (HTS code) and a normal duty rate, from 0% for many goods to double digits for some clothing and footwear. Goods that originate in Canada under CUSMA pay 0%.
2. Section 301: 10%
Since 24 July 2026 the US charges a 10% Section 301 tariff on most imports. CUSMA-qualifying Canadian goods entered duty-free under CUSMA are generally exempt, and many products are excluded altogether. Goods already under Section 232 don’t pay it.
3. Section 338: 50% on the Canada list
This is the one that hurts small sellers. The US first used Section 338 of the 1930 Tariff Act in July 2026, and the 50% tariffs took effect on 22 August 2026. The Government of Canada’s Trade Commissioner Service lists the covered categories as including plastics, furniture, ICT and electronics, paper, industrial machinery, wood, textiles and apparel, and sports equipment. Its wording is blunt: there is no exemption from Section 338 tariffs on Canada, CUSMA or not.
The list is set by HTS code and has already changed twice, in September and by a proclamation dated 23 October that took effect on 30 October. A category name isn’t enough: check your exact code.
4. Section 232: sector tariffs
These apply to every country, with few CUSMA breaks. The ones a small seller is most likely to hit:
- Steel, aluminium and copper products: 15% to 50%. Goods with less than 15% of these metals by weight are exempt.
- Upholstered furniture: 25%, rising to 30% on 1 January 2027.
- Kitchen cabinets and vanities: 25%, rising to 50% on 1 January 2027.
- Softwood lumber: 10%.
What it means for one parcel
Rates below are for illustration. Look up your own product’s MFN rate and check whether it’s on the Section 338 list.
A Halifax candle maker, made in Canada, not on the Section 338 list. A customer in Boston orders US$60 of candles. Say the candles’ normal duty rate is 5%.
| Shipped by | Duty | Why |
|---|---|---|
| Courier, with CUSMA origin details on the invoice | US$0 | CUSMA removes the MFN duty and Section 301 |
| Canada Post | US$9 (5% + 10% of US$60) | Postal shipments pay MFN and Section 301 even for CUSMA goods |
The courier will usually add a brokerage or clearance fee, so compare the total.
A Toronto knitwear brand, made in Canada, on the Section 338 list. A customer in Chicago orders a US$100 sweater. Apparel and textiles are among the Section 338 categories.
| Shipped by | Duty | Why |
|---|---|---|
| Courier, CUSMA-qualifying | US$50 | Section 338’s 50% applies regardless of CUSMA |
| Canada Post | US$60 or more | 50% Section 338 + 10% Section 301 + the sweater’s MFN rate |
A Calgary reseller of goods made in China. Shipping from Canada doesn’t make goods Canadian. Country of origin decides the duty, so these goods pay whatever applies to Chinese-origin products. They don’t get CUSMA and they aren’t covered by the Canada-only Section 338 list.
Canada Post vs couriers
- Canada Post: US duties must be prepaid before Canada Post accepts the parcel. Canada Post works with Zonos to calculate and collect them. According to the CFIB and Canada Post, postal shipments pay duty even when the goods qualify under CUSMA, so made-in-Canada goods lose their CUSMA advantage in the mail.
- Couriers (UPS, FedEx, DHL, Purolator): can still claim CUSMA if your commercial invoice carries the origin details. You can ship duties paid (DDP) or leave duty to the buyer, who also pays the courier’s fees.
On Etsy, orders shipped to the US from abroad have had to go DDP since 9 July 2026, so the buyer pays nothing at the door.
How to check your product’s tariff code
- Find your HTS code. Search the US Harmonized Tariff Schedule. Add it, with country of origin, to every product in your store. Shopify needs both to estimate duties at checkout.
- Check whether it qualifies under CUSMA. The Trade Commissioner Service’s CUSMA compliance guide explains rules of origin and the certification you need. Get declarations from your suppliers for materials you didn’t make.
- Check the Section 338 list. Compare your code against the current proclamation annexes. The Trade Commissioner Service tariff FAQ summarises each change and links to them.
- Re-check after every announcement. US customs publishes changes as CSMS messages, and your courier or customs broker can confirm the rate for your code.
What to do now
- Price duty in. US buyers abandon parcels that arrive with a bill. Ship DDP and build the duty into your US prices or charge it at checkout.
- Compare postal and courier costs for made-in-Canada goods, using your real duty rate.
- Keep CUSMA paperwork on file for at least five years.
- Don’t add GST/HST to US orders. Exports are zero-rated. See do you charge GST to US customers?
- Watch US sales tax separately. Tariffs and sales tax are different taxes. Most small Canadian sellers owe no US sales tax until they pass a state’s threshold. See US sales tax for Canadian sellers.
- Consider other markets. If the US is now too expensive for your category, sales elsewhere in Canada are tariff-free. See selling across Canada.
FAQ
What US tariffs apply to Canadian goods in November 2026?
As of 1 November 2026, most Canadian goods face a 10% Section 301 tariff unless they qualify under CUSMA, a 50% Section 338 tariff on a list of Canadian products with no CUSMA exemption, and Section 232 tariffs on goods such as steel, aluminium, copper, lumber and some furniture. On top of these comes the product’s normal US duty rate.
Are CUSMA goods exempt from US tariffs?
Partly. Goods that qualify under CUSMA’s rules of origin and are entered under it are generally exempt from the 10% Section 301 tariff and pay no normal duty. They are not exempt from the 50% Section 338 tariffs, and many Section 232 tariffs apply regardless. Goods shipped from Canada but made elsewhere don’t qualify.
What is the Section 338 tariff on Canada?
Section 338 of the Tariff Act of 1930 is a provision never used before 2026. Tariffs of 50% under it took effect on 22 August 2026 on about US$20 billion of Canadian goods, in categories including plastics, furniture, electronics, paper, machinery, wood, textiles and apparel, and sports equipment. The list was revised in September and October 2026.
Do I pay US duty on small parcels sent from Canada?
Yes, in most cases. The US$800 de minimis exemption for commercial shipments has been suspended for every country since 29 August 2025 and is repealed by law from 1 July 2027. Only genuine gifts of US$100 or less between individuals still enter duty-free.
Is Canada Post or a courier cheaper for shipping to the US?
For goods made in Canada, a courier is often cheaper on duty. Couriers such as UPS, FedEx, DHL and Purolator can still claim CUSMA. Canada Post shipments must have duties prepaid, and postal shipments pay the normal duty plus the Section 301 tariff even when the goods qualify under CUSMA. Compare the duty and the courier’s brokerage fees.
Do I charge GST on goods I ship to the US?
No. Goods you ship to a US customer are zero-rated exports for GST/HST, so you charge 0%. Keep proof the goods left Canada. These sales still count towards the $30,000 GST/HST registration threshold.
Related guides
- Selling to US customers from Canada
- US sales tax for Canadian online sellers
- US sales tax guide
- GST/HST for online sellers in Canada
Sources: Government of Canada Trade Commissioner Service (US tariffs FAQ, last modified 28 September 2026), CFIB, CBP and published proclamations, checked 1 November 2026. Tariff rules change often; confirm your product’s rate with your courier or a customs broker before you ship.