Made in Canada Is Now the Tariff: What Changed on August 22
By The MyShop Team · 2026-09-05 · 7 min read
If you make things in Canada and sell them to buyers in the United States, the sentence you have probably been telling yourself since last year is that you are fine, because you are CUSMA exempt, because you build everything here. As of 22 August 2026 that sentence is no longer a defence. Etsy has said so on its own Announcements forum, in plain words, and the change is already live.
Key takeaway: An additional 50 percent US import duty on certain Canadian-origin goods took effect on 22 August 2026 under Section 338 of the Tariff Act of 1930. Etsy states that CUSMA and USMCA treatment does not remove it. Making the item yourself in Canada is what triggers the duty, not what protects you from it.
What Etsy actually announced
The announcement came from James Ossman, VP and General Manager for International at Etsy, on Etsy's own Announcements forum. The operative line, quoted in full: "As of August 22, 2026, the additional 50% import duty on certain Canadian-origin items entering the US is now in effect. If you ship affected Canadian-origin items to the US, check the tariffs calculator in Shop Manager and confirm current duty charges with your shipping provider before shipping."
The duty was originally scheduled for 12:01am ET on 19 August. Etsy confirmed it was suspended and re-set: the effective moment is 12:01am ET on 22 August 2026. If you read a news piece or a seller thread dated somewhere between the 19th and the 21st, you very likely read that the duty had not switched on. It has.
Etsy also names the mechanism. The duty applies to certain 8-digit HTS classifications when Canada is the product's declared country of origin. And it names the categories in scope, with the caveat that the list is not exhaustive: some jewelry, toys, art and stationery, beauty products, wooden goods, textiles and apparel, and decorative plastic items.
Read that list again. Jewelry. Art and stationery. Wooden goods. Textiles and apparel. That is not a list of industrial commodities. That is a description of an Etsy shop.
Country of origin, not country of shipment
Two details decide whether a given parcel is exposed, and both of them are commonly misread.
First, the test is country of origin, and origin is a property of the item, not of the postbox. A pendant made at your bench in Halifax and shipped to a US buyer from a fulfilment address in the United Kingdom still declares Canada as its country of origin. A blank you imported from Vietnam, embellished lightly and shipped from Toronto, may well not. Where you post from is bookkeeping. Where it was made is the question customs asks.
Second, Etsy's own instruction is to work item by item, through the classification, and not by category. Etsy's wording is "certain 8-digit HTS classifications", and its listed categories carry the words "this list isn't exhaustive". Two items from the same bench can land on different sides of the line. That is why no responsible answer to "does this apply to me" is a percentage. The answer is your own product's HTS code, checked against your carrier.
Watch out: Do not quote a duty rate to a buyer for a product category, and do not accept one from a forum post. Etsy points you to the tariffs calculator in Shop Manager, and Etsy's own framing of that tool is an estimate, not a final figure. Confirm the actual charge with your shipping provider before you ship.
Etsy's own two pages disagree, and one of them will cost you money
Here is the part almost nobody has noticed, and it is the reason so many Canadian sellers still believe they are covered.
Etsy's Seller Handbook article on tariff policy, page date 31 August 2026, tells a Canadian seller this: "For sellers shipping from Canada to the US: Note that under USMCA some goods may enter the US tariff-free if they meet the rules of origin." The same article says elsewhere that "some items that enter the US from Canada or Mexico may be eligible for exemptions from tariffs and duties under the United States-Mexico-Canada Agreement (USMCA)."
Etsy's announcement says the opposite for affected goods: "Important: CUSMA/USMCA treatment doesn't remove the new additional 50% duty for affected Canadian-origin goods. Any preferential treatment may still apply to the base duty."
Both statements are Etsy's own words, and both are literally true at once. The Handbook is describing base duty. The announcement is describing the Section 338 layer stacked on top of it. The Handbook does not say so anywhere. It contains no mention of Section 338, no mention of the 50 percent duty, and no mention of the 22 August date at all.
"A seller who reads only the Handbook, which is where Etsy sends them, prices their listings wrong."
This matters beyond the tariff itself. When two of Etsy's own surfaces answer the same question differently, the safe habit is to read both before you act, and to treat the more recent and more specific one as the operative instruction for the thing it specifically addresses.
What this collides with: you are already required to prepay duties
Since 9 July 2026 Etsy has required a Delivered Duty Paid shipping method for orders shipped to US buyers. Etsy's Seller Policy states it as a flat obligation: sellers must "Ensure that any orders shipped to the United States are sent using a Delivery Duty Paid (DDP) shipping method, and not take any action (including use of Delivery Duty Unpaid (DDU) shipping) that would result in buyers being charged additional fees after purchase."
The enforcement is real and it is financial. Etsy has stated that if buyers are charged tariffs or collection fees by the carrier, "they are eligible to be refunded and the charges will be deducted from the seller." Shipping DDU from outside the United States also puts Purchase Protection eligibility at risk: Etsy says that if such an order arrives late or does not arrive, "you may be responsible for the refund."
Put the two together. The duty on your Canadian-origin goods just went up, and you are the one contractually expected to have paid it upfront. That is why this is a pricing problem this week rather than a customs problem later.
What to do this week
Five things, in order, and none of them require a customs broker.
Find your codes. Etsy added a tariffs estimator inside the listing form, in the Price and inventory section. Etsy describes it as letting you "estimate potential tariff costs, compare shipping options, and review possible HS codes without leaving Shop Manager." Start there, for your best sellers first.
Split your catalogue by origin. Work out which of your listings genuinely declare Canada as country of origin and which do not. This is the single fact the duty turns on, and most shops have never written it down anywhere.
Confirm with your carrier, not with a forum. Etsy's own instruction is to confirm current duty charges with your shipping provider before shipping. The estimator is a planning tool.
Check your DDP setting is actually on. The obligation predates this duty and it has teeth of its own. If DDP genuinely is not available in your country, Etsy publishes a narrow exception with three conditions: state in the listing that duties are not included, message the buyer with the estimated total duty and carrier fee, and get their agreement before you ship.
Look backwards once. Etsy has said that following a United States Supreme Court ruling, "some sellers may be eligible for refunds on tariffs that were implemented under the International Emergency Economic Powers Act (IEEPA)." Etsy notes that refund processes for shipments entered by a postal carrier have not been released, and points sellers to their carrier or to US Customs and Border Protection. It is a maybe, not a promise, but it costs one email to ask.
Frequently asked questions
I make everything myself in Canada. Does that protect me?
No. Making the item in Canada is what makes it Canadian-origin, which is the condition the additional duty attaches to. Etsy states that CUSMA and USMCA treatment does not remove the new duty for affected goods, though preferential treatment may still apply to the base duty underneath it.
My stock left Canada before 22 August. Am I clear?
Not necessarily. Etsy's announcement describes the duty as in effect as of that date for items entering the US. Goods still in transit when the date passed are the case to check directly with your carrier rather than assume.
Which of my products are affected?
Etsy names categories in scope, including some jewelry, toys, art and stationery, beauty products, wooden goods, textiles and apparel, and decorative plastic items, and says the list is not exhaustive. The binding test is the 8-digit HTS classification for the specific item, so check your own codes rather than reasoning from the category name.
Should I just stop shipping to the US?
That is a business decision, not a compliance one, and it deserves real numbers rather than a reflex. Price the duty into a handful of your best sellers first and see what it does to the margin before you close a market.