TRADE ALERT – IMPORTS
HEADLINE	Administration Implements Section 338 Tariffs on Canada
DATE	July 29, 2026
AGENCY	Department of Commerce; Department of Treasury; Department of Homeland Security; U.S. Trade Representative; Customs and Border Protection; Trump Administration
EFFECTIVE DATE	August 19, 2026 at 12:01 a.m. Eastern time
BACKGROUND	Section 338 of the Tariff Act of 1930 allows the President to respond to discrimination by foreign countries by declaring additional duties. To impose tariffs under Section 338, the President is required to find that a foreign country imposes an unreasonable charge, exaction, regulation, or limitation that is not equally enforced on the like articles of every foreign country, or discriminates in fact against U.S. commerce in a way that places the commerce of the United States at a disadvantage compared to the commerce of any foreign country. These tariffs may not exceed 50% and may not take effect earlier than 30 days after the President’s proclamation.
DETAILS	On July 20, 2026, President Trump issued three Proclamations under Section 338 to impose an additional 50% tariff on certain Canadian products in retaliation for restrictions on the sale of U.S. alcohol, and imports of U.S. automobiles and dairy products. Each of the Proclamations allege specific limitations or discriminatory practices as the basis for the Section 338 tariffs:   Dairy Proclamation President Trump determined that Canada maintains a tariff-rate quota on cheeses under the United States-Mexico-Canada Agreement, but maintains different eligibility criteria which is more restrictive than similar quotas for the European Union, thereby discriminating against U.S. goods. • A 50% tariff will be imposed on all articles listed in Annex I to the Proclamation, including milk and cream products, lactose, whey, and molasses.   Alcoholic Beverages Proclamation President Trump determined that Canada unreasonably burdens and disadvantages U.S. alcoholic beverages through restricting the distribution and sale of alcoholic beverages. • A 50% tariff will be imposed on all articles listed in Annex I to the Proclamation, including certain alcohol products, paper and paper board, and hockey equipment.   Motor Vehicles Proclamation President Trump determined that Canada imposed a 25% tariff on non-USMCA qualifying U.S. motor vehicles, and reduced tariff-rate quota volumes, discriminating against and unreasonably burdening U.S export of auto and auto parts. • A 50% tariff will be imposed on all articles listed in Annex I to the Proclamation, including honey, animal products such as feathers and hides, certain plants, essential oils, certain plastic goods, plywood and MDF, certain articles of clothing, articles of metal, tools, camera and radio equipment, and parts of furniture. For all three Proclamations, products subject to Section 232 and articles of civil aircraft will be exempt. Additional limited exceptions include energy, potash, certain fish and critical minerals.   No USMCA exception will apply to the Section 338 tariffs.   This is the first time that Section 338 has been used to impose tariffs by any President.
BASIS	Trade Act of 1930 (Section 338), 19 U.S.C. § 1338
HTS/  PRODUCTS	All products defined except for specified articles and those articles subject to Section 232 tariffs (including steel, aluminum and coper and their derivatives, autos, medium and heavy-duty trucks, wood products, and semiconductors)
COUNTRY	Canada
CITE	White House: Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Alcoholic Beverages – The White House   Federal Register: Federal Register :: Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Alcoholic Beverages   White House: Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Motor Vehicles – The White House   Federal Register: Federal Register :: Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Motor Vehicles   White House: Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Dairy – The White House   Federal Register: Federal Register :: Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Dairy   White House: Fact Sheet: President Donald J. Trump Imposes Additional Tariffs on Canada – The White House

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