ATLANTA, Ga. (Atlanta News First) — Georgia economic leaders say the state’s businesses are being caught in the middle of an escalating trade war between the United States and Canada, as new tariffs from both countries threaten industries from agriculture to manufacturing.

The U.S. imposed an additional 50% tariff on a range of Canadian goods on Aug. 22. Canada announced retaliatory tariffs on $20 billion in U.S. goods that are set to take effect Sept. 8.

The Georgia Chamber Foundation released a briefing this week examining the potential impact on the state’s exporters, manufacturers and industries that rely on Canadian goods and inputs.

Canada was Georgia’s largest export market in 2025, receiving $6.8 billion in Georgia goods exports, or about 11% of the state’s total goods exports, according to the Georgia Chamber Foundation. Canada was also Georgia’s fourth-largest total trade partner, accounting for $13.3 billion in two-way goods trade last year.

Tariffs already affecting Georgia farmers, businesses

Scott Craig, a cattle farmer at Family Roots Farm, said the tariffs are already hitting his bottom line. He said rising costs for fertilizer, fuel and equipment have to go somewhere.

“Everything, whether it’s tariffs or whatever they do, it’s going to end up back on the consumer,” Craig said.

Canada has targeted Georgia products including steel, lumber and pecans in its retaliatory tariffs, according to the Georgia Chamber Foundation briefing.

Tom Smith, an economist at Emory University, said he has not seen a Georgia business benefit from the tariffs.

“I haven’t seen a business in Georgia say, these tariffs have been awesome for me,” Smith said.

Smith said the potential impact on businesses could be severe. He said business owners watching the impact unfold in real time are taking it personally.

“It’s potentially catastrophic. Businesses going out of business because nobody up north is actually buying their product anymore,” he said. “That person is going to be freaking out saying, why doesn’t anybody care about me?”

Administration says tariffs will help farmers

The Trump administration has said the tariffs will ultimately benefit American farmers.

U.S. Secretary of Agriculture Brooke Rollins said she expects a positive outcome.

“I think this is going to be very positive for the American farmers,” Rollins said.

What the briefing says is at risk

According to the Georgia Chamber Foundation, Canada’s retaliatory tariffs are expected to affect approximately 700 U.S. tariff categories, including steel and aluminum, dairy, agricultural equipment, pulp and paper, electronics, machinery, clothing, furniture, fish and other foods. For many American products, the tariff would double, with the largest share of the new measures affecting steel and aluminum.

The new U.S. tariffs also extend across a wide range of industries, according to the briefing, including:

• Construction, housing, forest products and packaging
• Chemicals, plastics and rubber
• Machinery, electronics, telecommunications and tools
• Food, agriculture, horticulture and alcoholic beverages
• Dairy, sweeteners and food-processing inputs
• Textiles, consumer goods and recreation

The U.S. tariffs were issued under Section 338 and apply to a separate, product-specific basket of Canadian imports, according to the Georgia Chamber Foundation’s trade report. Together, the baskets cover roughly $20 billion in Canadian imports, or about 5.2% of U.S. goods imports from Canada in 2025.

Unlike in previous tariff actions, a carve-out for goods that qualify under the United States-Mexico-Canada Agreement does not apply in this case. If a Canadian product is listed in any of the three Section 338 annex schedules, the additional 50% duty applies even if the product satisfies USMCA rules of origin, according to the report.

The Section 338 duties do not apply to Canadian energy, potash, specified fish and critical-mineral products, goods already subject to Section 232 tariffs, or qualifying civil-aircraft articles and parts.

How talks broke down

Trade talks between the U.S. and Canada broke down last week after three days of negotiations, according to the Georgia Chamber Foundation’s report. The two sides had appeared close to a deal that could have reduced U.S. tariffs on steel, aluminum and autos, and reopened Canadian provincial markets to U.S. alcohol.

Canada officials said last-minute changes proposed by the U.S. made the deal unfair and uneconomic, while U.S. officials said Canada declined terms that had been agreed upon earlier in the week, according to the report. Canadian Prime Minister Mark Carney then suspended the talks and recalled Canada’s negotiating team. No further meetings are scheduled.

Following the breakdown, President Donald Trump threatened to implement additional tariffs on Canadian cars, trucks, auto parts and steel, according to the report.

Georgia Chamber response

Daniela Perry, executive director of the Georgia Chamber Foundation, said Georgia businesses have adapted to changing trade conditions.

“Georgia businesses have remained resilient and nimble through evolving trade negotiations,” Perry said.

In the foundation’s briefing, Perry said the organization is encouraging trade negotiations to restart.

“We encourage trade negotiations to re-start enabling utilization of existing free trade agreements as well as exploring opportunities to expand these agreements reducing costs, providing predictability, and deepening prosperity for Georgians and Georgian businesses,” Perry said.

The Georgia Chamber Foundation is encouraging Georgia businesses that trade with Canada to review the tariff classifications and rates applicable to their products and shipments and prepare for continued changes as negotiations potentially resume.

Craig said the impact will be easy to spot without reading a report.

“They’ve also have to see their food bill going up every week they go to the grocery store,” he said.

What’s next

Canada’s retaliatory tariffs — ranging from 15% to 50% on roughly $20 billion in U.S. goods — are set to take effect on Sept. 8. A full list of U.S. products subject to the counter-tariffs is available on the Canadian Department of Finance’s website.

Experts say if no deal is reached before then, Georgians could begin seeing the impact on their household costs within weeks.

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