US Tariff Escalation Leaves Overall Canada Trade Impact Broadly Unchanged, BMO Says

07:21 AM EDT, 09/10/2026 (MT Newswires) -- The United States has stepped up its tariff dispute again with Canada this week, but the overall impact on trade is expected to remain roughly the same, according to BMO Capital Markets in a note. "With the overall exposure little changed, the case for an additional broad Canadian counter-tariff round is not especially compelling," wrote BMO Senior Economist Erik Johnson in Wednesday's note. The 50% Section 338 tariffs currently cover $20.75 billion of Canadian exports, including USMCA-compliant goods. Five US proclamations signed on Tuesday will change the list of affected products from next Tuesday. Items such as rock salt, toilet paper and cement will be removed, while products including all-terrain vehicles and more dairy goods will be added, said the bank. As a result, the value of Canadian exports subject to the tariffs is expected to fall to $18.60 billion, or 4.9% of Canada's total goods exports to the US. From Sept. 29, the US will also restrict around $940 million of Canadian alcohol, dairy and motorcycle exports. Total trade affected will rise to $19.54 billion, or 5.2% of exports, which is slightly less than the original July 20 package, added BMO. The broader economic impact looks largely unchanged from August, but the bans could still have a major impact on companies that depend heavily on US sales, according to Johnson.