Please see the following messages from Sidley Austin LLP and NCBFAA regarding the additional tariff impose on Canadian products.
(Update courtesy of Sidley Austin LLP)
Any good feelings generated from co-hosting the World Cup appear to have worn off already… Earlier today, President Trump issued 3 proclamations imposing an additional tariff of 50% on certain products of Canada under Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338). There is no USMCA exemption from these tariffs, and they are scheduled to take effect August 19, 2026.
According to the White House fact sheet accompanying the proclamations, the U.S. action is “in response to Canada’s discriminatory treatment of American products” – specifically, cars, alcohol and dairy. As a refresher, Canada was one of two countries to retaliate against the additional tariffs President Trump imposed early in his second term. Canada’s retaliation took the form of increased duties on U.S. products and other actions (e.g., not stocking U.S. alcohol in government-run liquor stores).
The United States has determined that Canada’s retaliation discriminates against U.S. exports (which was the whole point). For example, the fact sheet notes that:
From April 2025 through March 2026, Canadian imports of U.S. motor vehicles decreased by approximately 22%, or $5.6 billion, compared to the same period in 2024-2025. Exports of motor vehicles from other countries to Canada have increased to meet the demand previously filled by U.S. exports.
From March 2025 through February 2026, Canadian imports of U.S. alcoholic beverages decreased by about 81%, or $582 million, compared to the same period in 2024-2025.
Based on this, the president is imposing an additional 50% tariff on certain products of Canada under Section 338. This provision allows the president to impose a tariff of up to 50% on products of any foreign country determined to “place[] any burden or disadvantage upon the commerce of the United States[.]” The provision has never been used before.
All companies that import articles from Canada should review the proclamations. The specific products subject to the additional 50% tariff are identified in an annex to each proclamation. See Annex in the links above. Given that the tariffs do not go into effect until August 19th, it is possible that a negotiated resolution can be reached before then. That said, given the state of U.S.-Canada trade relations, I am not sure I would bet on it.
(Update courtesy of NCBFAA)
President Trump Sets 50% Tariff Under Section 338 on Certain Canadian Products via Three Separate Proclamations
President Trump today, July 20, said in a proclamation that his administration under Section 338 of the 1930 Trade Act will impose an additional ad valorem duty of 50% on certain products of Canada, effective 12:01 a.m. ET on Aug. 19, in response to Canada’s tariff rate quotas for dairy products.
In another proclamation utilizing Section 338 announced today, July 20, the president called for additional ad valorem duty of 50% on certain Canadian products, effective as of 12:01 a.m. ET on Aug. 19, in response to Canada’s prohibition on imports and sales of U.S. alcoholic beverages.
In a third proclamation from the White House today, July 20, will apply Section 338 tariffs of 50% on certain Canadian products, effective 12:01 a.m. ET on Aug. 19, in response to Canada’s 25% on imports of U.S. motor vehicles that do not qualify for preferential, duty-free treatment under the United States-Mexico-Canada Agreement (USMCA).
See impacted Canadian product imports and HTS numbers: Proclamation, “IMPOSING ADDITIONAL DUTIES TO OFFSET CANADIAN DISCRIMINATION AGAINST THE COMMERCE OF THE UNITED STATES WITH RESPECT TO DAIRY,” Annex 1 and Annex II; Proclamation, “IMPOSING ADDITIONAL DUTIES TO OFFSET CANADIAN DISCRIMINATION AGAINST THE COMMERCE OF THE UNITED STATES WITH RESPECT TO ALCOHOLIC BEVERAGES,” Annex I and Annex II; and Proclamation, “IMPOSING ADDITIONAL DUTIES TO OFFSET CANADIAN DISCRIMINATION AGAINST THE COMMERCE OF THE UNITED STATES WITH RESPECT TO MOTOR VEHICLES,” Annex 1 and Annex II.
As reported by International Trade Today (ITT), this is the first time tariffs have been imposed under Section 338. “There is no time limit for these tariffs in the law, and no language in the law about when they should be removed,” ITT said.
If you have any questions, please contact our office.