U.S. 50% Tariffs on Certain Canadian Exports Now in Effect – Including on Some Cosmetics
Canada to Implement Retaliatory Tariffs Effective September 8th (List of Tariff Categories to be Provided This Week)
With the announcement near midnight last Friday that no agreement had been reached in the intensive negotiations between Canada and the United States, the weekend news cycles in Canada were dominated by coverage of what is clearly a historic breakdown in the relationship between Canada and the U.S.
The immediate effect for our industry is the imposition of U.S. tariffs on certain Canadian manufactured cosmetic products and inputs, and the possibility of counter-tariffs by Canada on some U.S. cosmetics exports effective September 8th, 2026.
The list of U.S. products that will be subject to counter-tariffs will be published later this week. The only guidance we have to date is in the Prime Minster’s statement on Saturday:
“Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families and businesses.
They will concentrate in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. This will also include products currently subject to the unjustified Section 232 and 338 tariffs. This is a focussed response to protect and defend our industries and allow them to compete with U.S. products in the Canadian market.
In the coming days, we will release the details of these new tariff measures, which will come into force the Tuesday after Labour Day.”
A round of tariffs and counter-tariffs will be disruptive and costly to manage in highly integrated industries such as ours and will upend the supply, manufacturing, and distribution channels for many companies who operate on a North American basis. Trade between Canada and Mexico is, of course, not subject to such tariffs and counter-tariffs.
These developments will hurt business and consumers on BOTH sides of the Canada-U.S. border in the short term and undermines planning and investment within North America.
How Did We Get Here?
On Saturday morning, Prime Minister Mark Carney issued a comprehensive statement and addressed the media in Ottawa. The Prime Minister’s remarks were more than just a political statement to address the moment but spoke to the longer-term direction which business needs to be aware.
We suggest that senior company officials read the Prime Minister’s statement or view the video of his news conference. It will provide useful insight into where the Canadian-U.S. relationship is heading as well as the developing trade environment in North America – which will be useful in planning and preparing for the future of business in North America.
The Prime Minister’s Statement can be found HERE.
A video of the Prime Minister’s Saturday Media Conference can be found HERE.
Is an “Agreement” Possible?
In the Immediate Term
A “backdown” on the current 50% U.S. tariffs and Canadian counter-tariffs is a possibility. Should the U.S. administration choose to back down on their Section 338 Smoot-Hawley tariffs (50%), Canada would likely hold off on its’ counter-tariffs.
As already discussed with our colleagues at the U.S. Personal Care Products Council, member companies with a management and/or manufacturing presence in the U.S. should be undertaking an outreach to the U.S. administration at this time to help influence them to back down on the 50% tariffs.
It is important to make our industry’s case for the importance and benefits of tariff-free trade for the cosmetics and personal care products sector across North America. As this is a problem that originated in the United States, it has to addressed in the United States.
In the Longer Term
As to any further agreements or “deals” between Canada and the U.S., including any re-negotiation of CUSMA, a very real impediment is the reliability of the U.S. government in keeping its commitments. A lack of reliability has consequently undermined its’ credibility in negotiations.
It should be remembered that Canada, the U.S., and Mexico already have a trade agreement (CUSMA or USMCA) which the first Trump administration negotiated and hailed as the “best trade agreement ever”. It is now Trump’s second term administration that has, and continues, to break this agreement.
As Prime Minister Carney has pointed out, the signature of the U.S. is now “written in pencil”. This sentiment is being widely expressed in Canada which begs the question if any meaningful “deal” with the current U.S. administration is even possible.
Added to this, as Prime Minister Carney noted in his statement, the objective of Canada has always been to have a “mutually beneficial trade agreement” that “respects our sovereignty” and “builds on our complimentary strengths”, and one that “lowers costs on both sides of the border” and creates jobs in both countries.
This is the basis in which the cosmetic industry in North America has developed and which has been of great benefit to our member companies and our customers. This is what we as an industry would like to maintain and have advocated for with the governments of Canada, Mexico, and the U.S.
However, as Carney further noted, “America’s attention and dedication” to these goals “have wavered” and that while Canada has “consistently proposed long-term partnerships”, America “has often pursued short-term transactions”.
Worse yet, as the Prime Minister stated, “Our government understood, before many, that America would transform all its commercial relationships. That it would put a series of tariffs on all its closest allies and use economic integration as a weapon.”
Under these circumstances, it is becoming increasingly evident that we will not be going back to the highly integrated North American market in which our industry grew and prospered. In fact, it may be time to imagine the unimaginable.
It is time to think about what the future of our industry and businesses looks like in the new trading environment. In doing so, we may have to the opportunity to effect what the new world will look like.
Possible Assistance for Affected Industries
In his Saturday statement, Prime Minister Carney referenced his government making available some $25 billion “to protect Canadian workers and business hurt by the American tariffs.”
Cosmetics Alliance will be pursuing this reference to determine what, if any, assistance may be available to Canadian-based cosmetic manufacturers. We will also seek to identify any assistance which could facilitate shifting U.S. production to Canadian-based facilities should counter-tariffs on U.S. imports be introduced.
What Cosmetics Alliance Has Done and Will Be Doing
In the lead up to last Friday’s breakdown in negotiations, Cosmetics Alliance:
- Participated with the Canadian Manufacturers Coalition in circulating a CME survey to member companies with manufacturing facilities in Canada to gather data on the effect of the 50% tariffs on Canadian-based manufacturing. This was intended to help inform the Canadian government in assessing the impacts of the 50% tariff threat.
- Connected with Minster Le Blanc’s office and provided data on the effects of the 50% U.S. tariffs on Canadian-based cosmetic manufacturers.
- Continued to gather intelligence from various sources as the negotiations unfolded.
- Responded to media requests on the potential effects of these U.S tariffs on our industry. An in-studio interview with CA President & CEO Darren Praznik on CBC News Network on Sunday, August 16th, 2026, can be viewed HERE.
Following the events of the weekend, Cosmetics Alliance:
- Met with industry association CUSMA partners at PCPC and CANIPEC to share information and discuss strategies.
- Responded to a media request from Bloomberg.
- Gathered information and perspectives for member companies to assist in informing their decision making.
In the days ahead, your Cosmetics Alliance Team will be:
- Advising members as new information becomes available including the list of tariff categories.
- Coordinating with PCPC on advocacy efforts for a withdrawal of the U.S. 50% tariffs and possible Canadian counter-tariffs.
- Working with member companies with Canada-based manufacturing facilities regarding securing any assistance the federal government can provide.
- Working with any member companies affected by potential counter-tariffs.
- Continuing our efforts with Health Canada to implement a meaningful Ministerial Reliance Order for low-risk cosmetic -like drug products and finally put in place the GMP Certificates for export to China (both needed to meet the Government’s objective of diversifying trade).
- And anything else that we can do that will assist our member companies in these difficult times!
Should you have any questions, comments, or information you wish to share with us, please contact your Cosmetics Alliance Team (ca@cosmeticsalliance.ca).
