U.S. tariffs hit data processors, semiconductors, other tech

While dairy, alcohol and autos dominate the foundation of 50 per cent tariffs released by the U.S. government, a slew of other products have made the cut that may impede Canada's tech sector.

On July 20, 2026, President Donald Trump issued three proclamations imposing 50 per cent tariffs on certain imports from Canada under Section 338 of the Tariff Act of 1930, hitting roughly 554 tariff lines. Along with milk and orange essential oils, Canada's neighbours to the south have also imposed tariffs on semiconductor media, solid-state non-volatile storage devices and monitors capable of directly connecting to and designed for use with an automatic data-processing machine of heading. 

Optical fibres are also included on the list alongside recorded optical media, for reproducing representations of instructions, data, sound and image, recorded in machine-readable binary form. 

A 2025 survey from MaRS Discovery District and Communitech found that 70 per cent of startups generated U.S. revenue in 2024, while 58% raised concerns about cross-border sourcing and supply chain stability. The report drew on more than 175 startups across healthtech, cleantech, and advanced manufacturing.

According to Electro-Federation Canada, 90 per cent of the country's electrical products are exported to the U.S.

Canada backed down from trade negotiations last week after the final days signalled progress toward a deal. Friday night, Prime Minister Mark Carney directed negotiators to reject a U.S. deal, citing a last-minute "power play" trying to restrict Canada's ability to strike trade deals with other countries, while the U.S. took issue with Canada's subsidies for French culture, the prevalence of French-language media online, and the requirement to have bilingual labels on products sold in Canada.

"In short, they asked too much and offered too little," said Carney at a Saturday morning press conference in Ottawa. "More fundamentally, the cumulative effect of U.S. demands revealed the limits of their commitment to a true economic partnership."

At that conference, Carney announced retaliatory tariffs that would be matched dollar for dollar, to the tune of CAD $28 billion. These measures will be in effect on September 8, 2026. The exact products subject to a tariff have yet to be announced.

The news comes after a year of speedy international trade deals within the country including a preliminary agreement in January 2026 in which Canada agreed to allow 49,000 Chinese electric vehicles into the market annually at a lowered tariff rate of 6.1 per cent, down from the 100 per cent tariff imposed in October 2024 and a recent deal with the United Arab Emirates securing a massive CAD $70 billion investment commitment from UAE sovereign wealth funds into Canadian infrastructure and energy projects.

The federal government will also begin discussions with the European Union to build a "stronger and deeper security and economic partnership" later this fall.

This is a developing story.