Carney heads to the United Nations with no meeting booked with Washington, eight days before the first outright American import bans on Canadian goods take effect
OTTAWA, September 21, 2026
Prime Minister Mark Carney left for the United Nations General Assembly in New York on Monday with no meeting scheduled with President Donald Trump or any senior member of his administration, leaving the Canada United States trade relationship frozen at its most damaging point in modern history and only eight days from a deadline that will convert tariffs into outright prohibitions on a list of Canadian goods.
The absence of a meeting is itself the news. Asked directly on Saturday, after a Liberal caucus retreat on Parliament Hill, whether he intended to sit down with the president in New York, Carney would say only: “We’ll meet with lots of leaders in New York.” A senior Government of Canada official, briefing reporters ahead of the trip on the condition that they not be named, put it more plainly still. “Nothing is confirmed right now,” the official said, according to reporting by CTV News and CP24 published Monday morning.
Foreign Affairs Minister Anita Anand, not Carney, will deliver Canada’s address to the General Assembly. The Prime Minister is in New York from September 21 to 23, according to Canadian officials, and his stated agenda is United Nations reform, multilateral partnerships and investment promotion. In a statement released ahead of the trip, Carney said: “At a moment when the international order is being remade, Canada intends to help shape it. At the General Assembly, we will sit down with partners old and new, defend the rules that protect our sovereignty, and turn co-operation into real opportunity for Canadian workers and businesses.” The statement did not mention the United States.
For Canadian importers, exporters and customs brokers, the diplomatic choreography matters less than the calendar. At 12:01 a.m. Eastern Time on Tuesday, September 29, three presidential proclamations signed on September 8 under Section 338 of the Tariff Act of 1930 take effect and bar a defined list of Canadian goods from entering the United States altogether. Alcoholic beverages, a set of dairy and whey products, molasses, non alcoholic beer and motorcycles with engine displacement above a specified threshold are among the categories covered. RBC Economics counted 68 products moving from the existing 50 per cent Section 338 duty to outright prohibition across the three orders.
This is not a rate change. It is a wall.
How the relationship reached this point
The sequence that produced the September 29 deadline began in July. On July 20, 2026, Trump signed three proclamations imposing 50 per cent Section 338 duties on a broad list of Canadian goods, originally effective August 19. The legal theory, as set out by the White House, is that Section 338 authorises the president to exclude goods from countries that maintain or increase discriminatory practices against United States commerce. The provision, enacted in 1930, had never before been used.
On August 18, a further proclamation suspended those duties for three days while negotiators worked. The suspension lapsed. On August 21, Ottawa ceased negotiations and recalled its team from Washington. Carney said the American side had “asked too much, and they offered too little.” On August 22 the 50 per cent duties took effect on roughly C$27.6 billion, or about US$20 billion, of Canadian goods. The two figures describe the same measure in two currencies and should not be read as separate actions.
Two days later, on August 24, Trump posted that tariffs on Canadian cars, trucks, automotive parts and steel would rise to 50 per cent on January 1, 2027.
Ottawa’s answer came on August 25. Finance Minister Francois Philippe Champagne and Dominic LeBlanc, the minister responsible for Canada United States trade, announced counter tariffs matching the American measures dollar for dollar and rate for rate, covering C$27.6 billion of American imports, alongside a support package for affected workers and firms. “When the United States asked too much and offered too little, we chose to stand up for Canadians,” Champagne said in the Finance Canada release. “Our dollar for dollar, rate for rate counter tariffs as well as a multi billion dollar support package will protect workers, farmers, families, and businesses as we build a stronger, more resilient, and more diversified Canadian economy.”
The counter tariffs took effect on September 8 at rates of 15, 25 and 50 per cent, each band matched to the corresponding American rate. Blakes, the Canadian law firm maintaining the most widely used public timeline of the dispute, counts 629 harmonised system codes on the Canadian list. Most news coverage has used the figure of more than 700 products. Both are defensible at different levels of granularity, and importers should work from the codes rather than the headline count.
On the same day the Canadian measures came into force, Trump signed five further proclamations. Three created the import bans effective September 29. Two modified the scope of the existing duties effective September 15, adding 122 tariff classifications, including more than twenty cheese lines, cattle hides, fox and mink furs, motorboats and yachts, golf carts, cotton mattresses and bamboo and rattan furniture, while removing rock salt and cement.
Anyone who classified a product line in August has to run the exercise again.
The stacking problem
The September 15 scope modification carried a change that has received far less attention than the bans but may matter more to landed cost. From that date, Section 338 duties stack on top of Section 232 duties, reversing the original non stacking rule.
The arithmetic is unforgiving. Aluminium profiles, bars, rods and tubes now carry a 25 per cent Section 232 duty and a 50 per cent Section 338 duty, for 75 per cent in additional duties before most favoured nation rates are applied. Iron and steel structural products face the same combination. Section 338 duties also stack on any anti dumping or countervailing duties already in force, according to United States Customs and Border Protection guidance.
Compliance with the Canada United States Mexico Agreement provides no relief whatsoever. The White House language on the proclamations states that the measures apply regardless of whether a good originates under the agreement. American law is explicit on the point: no provision of the agreement that is inconsistent with United States law has domestic effect, and Section 338 predates the agreement by nearly a century.
A separate 10 per cent Section 301 tariff applied to Canada from July 24, 2026 does exempt goods originating under the agreement. Section 232 does not stack on top of Section 301 or Section 338. The result is a matrix rather than a rate, and it now differs line by line.
What is still unresolved eight days out
The single largest open question for shippers is procedural rather than political. As of September 11, Customs and Border Protection guidance implementing the September 29 bans was still listed as pending.
The transition rule published with the proclamations provides that goods imported but not yet entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. Eastern on September 29 remain subject to the 50 per cent Section 338 duty rather than the prohibition. The controlling event is entry, not arrival, and not export. That distinction determines whether a container currently on the water is a duty bill or a total loss.
Freight forwarders have been publicly flagging the gap. Scott Case of Future Forwarding framed it in a client note on September 9: “An announcement establishes policy; CBP guidance establishes procedure.” Until a CSMS message issues, brokers are advising clients to prioritise entry filing over arrival scheduling and to consider warehouse withdrawal strategy for goods already in bond.
There is no announced exemption or exclusion process for the bans. A duty can be modelled, financed and passed through. A prohibition cannot.
Drawback is available on the 50 per cent Section 338 duties under the relevant tariff headings, but banned goods cannot generate drawback because they cannot lawfully enter. Goods admitted to a foreign trade zone must be admitted under privileged foreign status, which locks the applicable rate at the moment of admission.
Ottawa’s pivot to Europe
While Washington waits, Carney has spent the past week building elsewhere.
On Thursday, September 17, he addressed the European Parliament in Strasbourg, where European Commission President Ursula von der Leyen floated the prospect of Canada becoming the European Union’s first associate member. Trump called the idea a possible hostile act and threatened heavy tariffs on Europe in response.
On Sunday, September 20, Carney met French President Emmanuel Macron at Saint Pierre et Miquelon, the French archipelago off Newfoundland, in the first official visit there by a Canadian prime minister and the first French presidential visit since 2014. Standing beside Macron, Carney said: “Canada and Europe will build an alliance for the future that will strengthen our collective resilience so we can live our lives as we choose based on the values that we share.”
He was more direct about the United States. “There is now a price to be paid for access to the United States market,” Carney said, in remarks reported by The Associated Press, pointing to tariffs, investment commitments and demands for domestic policy changes.
Carney flew from Saint Pierre et Miquelon to Ottawa to meet Norwegian Prime Minister Jonas Gahr Store, who told reporters that tariffs should not become “a weapon to be used against countries, because we will all end up losers.”
The Canadian Chamber of Commerce announced a strategic partnership with CCI France on the same day, timed to the Macron meeting, with a memorandum of understanding to follow.
The diversification argument has support from unexpected quarters. Former Conservative prime minister Stephen Harper, who has described the close American relationship as among the country’s most precious assets, has endorsed the direction. “Thus, to maintain that sovereignty, we must pursue diminished reliance on the United States,” Harper said in remarks reported by The Associated Press. “I do find this all very sad, just as equally necessary.” He added that the government “had no choice but to take this path.”
Dominic Barton, chair of Invest in Canada and a former Canadian ambassador to China, framed the shift as overdue. “We can’t complacently count on it. It’s not about, let’s not do stuff with the U.S. It’s let’s crank the non U.S. Let’s be way more ambitious on that side,” Barton told The Associated Press. “Maybe in 20 years, we’ll thank Trump for shaking us out of our complacency. Let’s use the moment.”
The arithmetic is less accommodating than the rhetoric. Canadian merchandise exports to the United States totalled roughly C$564.6 billion in 2025, about 72.5 per cent of total merchandise exports according to Global Affairs Canada, the lowest share since the early 1980s but still the overwhelming bulk of the country’s external trade. Canada European Union two way goods and services trade came to roughly C$178 billion in 2025. The Comprehensive Economic and Trade Agreement has been provisionally applied since September 2017, and only 17 of 27 European Union member states have ratified it nationally. France is among the ten that have not.
As The Associated Press noted in its Monday dispatch, European associate membership does not yet exist as a legal category, and Europe cannot quickly replace a market that buys nearly three quarters of Canadian exports.
What the numbers say about the damage
The macroeconomic estimates diverge sharply, and the divergence is itself informative.
Bank of Canada Governor Tiff Macklem, announcing the September 2 decision to hold the policy rate at 2.25 per cent, said: “If the tariffs remain in place, they will hit targeted sectors hard. But we don’t expect them to have a large direct impact on the overall level of economic activity. Affected products represent about 5% of exports to the United States.”
Forecasters cluster around 0.7 to 1.0 per cent real growth for Canada in 2026 and 1.4 to 2.0 per cent for 2027. The Bank of Canada’s July Monetary Policy Report projected 0.7 per cent and 1.8 per cent, but that report reflects tariffs in place as of July 10 and therefore predates the entire Section 338 escalation. TD Economics published 0.9 and 1.6 per cent on September 17. National Bank published 0.9 and 1.4 per cent on September 4. RBC Economics published 1.0 and 1.6 per cent on September 14.
On employment, Trevor Tombe of the University of Calgary estimated in August that the measures would cost roughly 87,000 Canadian jobs, comprising 52,000 direct and 35,000 indirect positions, with Ontario absorbing about 36,100, Quebec 18,300, British Columbia 11,200 and Alberta roughly 9,000. National Bank projected about 100,000 job losses over eighteen months and a half point increase in the unemployment rate from 6.4 per cent.
Scotiabank dissents. Derek Holt has characterised the escalation as “more of a micro shock than a large macroeconomic shock,” with no material effect on the national unemployment rate and only modest effects on consumer prices. The gap between National Bank and Scotiabank, published nine days apart on the same event, is the widest in the current literature and should temper confidence in any single figure.
From the American side, Brad Setser of the Council on Foreign Relations, a former senior adviser at the Office of the United States Trade Representative, put the direct out of pocket cost of the 50 per cent tariff at about US$10 billion, “which isn’t nothing, but it is small relative to the overall U.S. economy, less than a twentieth of a percentage point of U.S. GDP.” Setser’s assessment, published August 27, also flagged the legal exposure: “Section 338 is also legally untested. It literally has never been used before, and there is a decent chance the courts rule that the Trump administration has overstepped its legal authority.”
That last point carries a sting for importers hoping for relief through the courts. Each ban proclamation contains a severability clause. If a court invalidates the prohibition as to a given import, that import reverts to the 50 per cent duty. A successful challenge does not produce duty free entry.
Yale Budget Lab calculated on August 25 that all American tariffs cost the typical United States household about US$1,077 a year, of which the Canada measures account for roughly US$30. The asymmetry in political cost mirrors the asymmetry in economic scale.
Where the pain is actually landing
The most concrete Canadian evidence comes from the Canadian Federation of Independent Business, which surveyed 1,545 members between August 28 and 31, with a margin of error of plus or minus 2.49 per cent, 19 times out of 20.
Forty six per cent of Canadian exporters selling into the United States reported being affected by Section 338. Forty nine per cent of Canadian importers sourcing from the United States reported being affected by Ottawa’s counter tariffs. Twenty six per cent of business owners reported major negative impacts from the American measures and 28 per cent from the Canadian ones. The median monthly cost reported by affected businesses was C$65,000.
The survival figure is the one to watch. Eighteen per cent of affected exporters and 12 per cent of affected importers told the federation they would cease to be financially viable if the trade war lasted three months or more. Three months from September 29 lands in the last week of December.
Business groups have been consistent. Candace Laing, president and chief executive of the Canadian Chamber of Commerce, called the original Section 338 action “a body blow to North American competitiveness in this self defeating trade saga” and said “a whopping, non absorbable tariff is not sustainable or viable for business.” She added: “For a small Canadian exporter operating on tight margins, this isn’t an abstract trade dispute. It means looking at your orders, your payroll and your employees and asking what you can still afford.”
Dennis Darby, president and chief executive of Canadian Manufacturers and Exporters, described the escalation as “an alarming escalation that will inflict serious damage on manufacturers, workers and consumers on both sides of the border,” adding that “Canada’s objective must be to restore predictable, tariff free trade and give manufacturers the certainty required to invest, hire and grow in Canada.”
Ontario Premier Doug Ford has backed the federal position without qualification, saying on September 10 that the deal on the table would have been terrible for the province and expanding Ontario’s tariff relief eligibility. The provincial ban on American alcohol remains in place pending removal of the tariffs or a settlement.
What importers and exporters should do this week
Four practical points follow from the current state of play.
First, classify to the tariff line, not the product category. Canadian counter tariff rates vary within product families. Hand tools and cutlery run 15 to 25 per cent. Machinery runs 15 to 50 per cent. Foodstuffs run 25 to 50 per cent. Cosmetics, plastics, LED lighting, toys, sporting goods and motorcycles sit at 50 per cent. Railway cars and metal fittings sit at 25 per cent. In agricultural equipment, mowers and tractor mounted cutter bars attract 15 per cent while farm wagons and certain livestock trailers attract 25 per cent, and tractors and combines are exempt entirely. There is no sector rate.
Second, know the remission routes. Standing remissions under the United States Surtax Remission Order, SOR/2025-122, remain available, covering goods imported for health care, public health, public safety, national defence or national security, goods used in Canada in manufacturing, processing, food and beverage packaging or agricultural production, and goods used in the manufacture of motor vehicles, chassis, parts, accessories, aircraft, spacecraft and related equipment. Steel derivative standing remission sits in SOR/2026-34. Discretionary remission under section 115 of the Customs Tariff remains available but Finance Canada has said it will be granted only where inputs cannot reasonably be sourced from Canadian or non American suppliers, or in rare case by case circumstances producing severe adverse economic impacts. Applications go to Finance Canada by email with “U.S. Remission” in the subject line and must include operations detail, tariff codes, import volumes and values, documented evidence of failed sourcing attempts, contractual constraints and the economic effect on costs, pricing, employment and investment.
Third, treat September 29 as an entry deadline, not a shipping deadline, and confirm the position with Customs and Border Protection before relying on it. Duty drawback treatment for Canadian surtaxes and for Section 338 duties on banned goods should be confirmed with both agencies rather than assumed.
Fourth, watch the procurement file. A presidential memorandum signed September 16 directs the Office of Management and Budget and the Office of the United States Trade Representative, working with the Federal Acquisition Regulatory Council, to identify and remove Canadian origin items from federal civil procurement, a market worth more than US$280 billion annually. No products have been named and no restriction is yet in force. Canadian suppliers to the American federal government should monitor for product specific guidance and any rulemaking, and note that the memorandum also contemplates restoring an item’s availability if Canadian policy changes.
The next fixed points
Canadian officials are reported to see little prospect of negotiations resuming before the American midterm elections in November. The Canada European Union summit is scheduled for Montreal on October 29 and 30. Trade Minister Maninder Sidhu has said Canada hopes to conclude a comprehensive economic partnership agreement with India by the end of 2026. On January 1, 2027, the threatened 50 per cent tariffs on Canadian automobiles, trucks, parts and steel are due to take effect.
Before any of that, there is September 29. In eight days, for a defined list of Canadian products, the question stops being what the duty costs and becomes whether the goods can cross at all.