U.S. Section 338
Since August 22, 2026, a 50% tariff with no CUSMA exemption covers Canadian industrial machinery, and since September 15, 2026 it stacks on Section 232 where both apply.
U.S. tariffs on Canadian goods (Trade Commissioner Service)SECTOR GUIDE · REGIONAL TARIFF RESPONSE INITIATIVE
Tariff relief for machinery and equipment makers
For industrial machinery, agricultural equipment, material handling and HVAC manufacturers.
Industrial machinery was added to the 50% Section 338 tariff in August 2026, and equipment with steel, aluminum or copper content can also face Section 232 tariffs, which Section 338 now stacks on. Canada's own counter-tariffs focus on agricultural equipment and appliances among other goods, raising costs for anyone buying U.S. components.
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Tariff facts checked against official sources on October 29, 2026 • Sources linked below
See all sector guidesHOW TARIFFS HIT THIS SECTOR
The tariffs that affect
machinery and equipment.
Equipment makers often see both effects: U.S. dealers and buyers holding off, and U.S. components costing more. Quotes lost on price because of the tariff are useful evidence.
Tariff measures change often. Each item links to the official source, and rates are as published on October 29, 2026.
U.S. Section 232 on metals
Steel, aluminum and copper derivative products face 10% to 50% on their full value, unless metal content is under 15% by weight.
U.S. tariffs on Canadian goods (Trade Commissioner Service)Canadian counter-tariffs
Canada's September 8, 2026 counter-tariffs focus on agricultural equipment, appliances and electronics, among other sectors. U.S. harvesting machinery is listed at 15% or 25%, forklifts at 15%, and refrigerators and freezers at 25% or 50%.
Counter-tariffs effective September 8, 2026 (Finance Canada)WHO QUALIFIES
Who this guide
is for.
Machinery makers qualify as manufacturers in a sector hit by Section 338 and, often, Section 232. Show which of your products are in scope and what share of sales goes to the U.S.
Retail, local consumer services (such as hotels, restaurants, utilities, healthcare and recreation), oil and gas extraction and construction services are generally not eligible.
Businesses we see in this sector
Industrial and process machinery builders. Agricultural equipment manufacturers. Material handling and lifting equipment. HVAC, refrigeration and appliance makers.
$1M+ in annual revenue
In at least one of your last two fiscal years, as an incorporated, for-profit business located and operating in the region you apply to.
Viable before tariffs
Assessed through your attestation, financial statements and operating history. Businesses founded after March 21, 2025 are considered case by case.
A documented tariff impact
Meet at least one test: a sector hit by Section 232 or 338 tariffs (directly or as a supplier), 25% or more of revenue from goods ultimately exported to the U.S., or harm from tariffs or the uncertainty they created.
HOW RTRI CAN HELP
Liquidity assistance
and pivot projects.
Liquidity assistance covers tariff-related cash-flow shortfalls in your existing labour and overhead. Pivot projects fund net-new investment on top of the business you already run. You can apply for either, or both.
01 / EXISTING LABOUR AND OVERHEAD
Liquidity assistance
Non-repayable support for a tariff-related cash-flow shortfall in the business you already run.
- Funding
- Up to $2M, non-repayable
- Basis
- 50% of average monthly payroll, capped at your demonstrated 12-month need
- Period
- Up to 12 months, ending by March 31, 2028
For machinery and equipment
Liquidity covers 50% of average monthly payroll over the last 12 months, up to $2M, so you can keep engineering and production teams in place while orders recover.
Tariffs, customs duties, raw materials, inventory and debt payments are not eligible liquidity costs. Dividends are restricted while liquidity support is in place.
02 / NET-NEW INVESTMENT
Pivot projects
Funding for net-new investment on top of your existing labour, overhead and operations.
- Non-repayable
- Up to $1M; up to 50% of eligible costs
- Repayable
- Over $1M; up to 75% of eligible costs, interest-free
- Completion
- By March 31, 2029
Typical projects in this sector
- New equipment designs for Canadian and non-U.S. customers
- Robotic welding and automated assembly
- Re-sourcing U.S. components to Canadian suppliers
- Dealer and service development in new export markets
- Electrification and controls upgrades to your product line
Projects need new, incremental costs and measurable results. Land and building purchases, entertainment, vehicles and refinancing are not eligible.
How the limits fit together
Up to $3M in combined non-repayable support: $2M for liquidity plus $1M for a non-repayable pivot. Total RTRI support, including repayable funding, is capped at $20M per business. The same costs cannot be funded twice.
THE EVIDENCE THAT MATTERS
What to gather
before you apply.
Tariff impact is what gets assessed. You do not need to attach every business record, but each claim should trace back to one.
Examples of indirect tariff impact- U.S. sales and dealer orders before and after August 2026
- Quotes lost or delayed because of tariffs
- Broker statements showing Section 338 or 232 duties
- Invoices for U.S. components before and after September 8, 2026
- Reduced shifts, layoffs or Work-Sharing
WHERE TO APPLY
Apply through your
regional agency.
RTRI is delivered by seven regional development agencies, each with its own process. You apply to the agency for the region where your business operates, and separate requests are needed for employees in more than one region.
PrairiesCan
Alberta, Saskatchewan and Manitoba
Detailed application in the PrairiesCan online portal
FedDev OntarioSouthern Ontario
Fillable PDF form, submitted from Adobe Acrobat Reader
CEDQuebec
Contact CED first; CED assesses eligibility, then sends the form
PacifiCanBritish Columbia
PacifiCan online portal, stream “BC (PacifiCan) - RTRI-Business”
ACOAAtlantic Canada
MyACOA Client Portal, after talking to your nearest ACOA office
ALL REGIONSFind your agency
All seven regional development agencies
SECTOR QUESTIONS
Tariff relief for
machinery and equipment, answered.
Practical answers based on the agencies' published RTRI guidance and official tariff sources.
Is there tariff relief funding for equipment manufacturers?
Yes. Machinery and equipment makers can apply to the Regional Tariff Response Initiative through their regional development agency for liquidity support, pivot project funding, or both, if they meet the eligibility criteria.
Is CUSMA-compliant machinery exempt from Section 338?
No. According to the Trade Commissioner Service, the Section 338 tariffs apply without an exemption for CUSMA-compliant goods, and industrial machinery has been in scope since August 22, 2026.
Can agricultural equipment makers in the Prairies apply?
Yes, through PrairiesCan, which accepts RTRI applications until December 31, 2028 or until funding is committed, and usually decides within 90 business days of a complete application.
What machinery projects can a pivot project fund?
New, incremental investments with measurable results, such as new product designs, automation, re-sourcing components to Canadian suppliers and market development outside the U.S.
LET'S FIND YOUR NEXT STEP
Tariffs changed the plan.
Let's work on the response.
Tell us what has changed for your business. In a free, one-on-one consultation, we will help you understand your tariff relief funding options and next steps, whether or not you work with us.
Independent advisory by Fundspoke. We are not a government agency. Tariff measures and program terms change often; official sources, your regional agency's current rules and your contribution agreement govern. Your customs broker can confirm how tariffs apply to your products.