President Trump Imposes New 50% Tariffs On Certain Canadian Imports

On July 20, 2026, President Trump invoked Section 338 of the Tariff Act of 1930 (“Section 338”) to impose 50% additional tariffs on certain goods of Canada, including United States-Mexico-Canada Agreement (USMCA)-compliant goods, effective August 19, 2026. According to a press release from the Office of the U.S. Trade Representative, the tariffs impact nearly $20 billion in annual imports of goods from Canada.

Section 338 authorizes the President to impose duties on a foreign country when, among other things, he finds that the foreign country discriminates against U.S. imports as compared to imports from other sources. In three proclamations announcing the imposition of the new tariffs, President Trump determined that Canada discriminates against U.S. exports in the dairy, alcoholic beverage, and motor vehicle sectors and imposed the tariffs to offset the resulting burden on U.S. commerce with Canada. 

Section 338 has not been used or threatened for at least 70 years and represents an expansion of the trade tools employed by the United States. The statute caps tariffs under Section 338 at 50% and allows for tariffs to take effect 30 days after they are proclaimed. The President may subsequently suspend, revoke, supplement, or amend the proclamation.

Canadian Goods Affected

The new duties will apply even to certain products that qualify as originating under USMCA, meaning duty-free treatment under the agreement does not shield importers from these measures. The new duties will not apply to products already subject to Section 232 tariffs, including certain steel, aluminum, and copper products, nor will they apply to goods covered by the WTO Agreement on Trade in Civil Aircraft and certain other specified products.

The new tariffs in response to Canadian discrimination against U.S. dairy products will apply to Canadian goods including:

• Milk and cream
• Whey
• Lactose
• Fructose syrups
• Molasses
• Nonalcoholic beer
• Peppermint oil
• Peptones

The new tariffs in response to Canadian discrimination against U.S. alcohol will apply to Canadian products including:

• Malt beer
• Wine
• Cider
• Brandy, whiskies, and other liquors
• Certain wood paper products, including wooden tableware and basketwork
• Certain paper
• Ice-hockey and field-hockey equipment

The new tariffs in response to Canadian discrimination against U.S. motor vehicles will apply to Canadian products including:

• Honey
• Feathers
• Flower bulbs, flowers, seeds, and saps
• Certain mixes and doughs
• Salt
• Portland cement
• Paints and varnishes
• Essential oils
• Makeup
• Candles
• Gelatin
• Various fatty acids and alcohols
• Sorbitols
• Certain plastics and plastic products, including vinyl tile floor coverings, sacks, and bottles
• Animal hides
• Certain leather and travel goods
• Certain wood products, including wood moldings, particle board, MDF, plywood and veneered panels, doors, picture frames, and pulpwood
• Certain paper products, including toilet and other sanitary paper stock, wallpaper, and envelopes, paper tablecloths and napkins, paper bags, diaries and notebooks, and paper plates
• Certain textile products, including yarns, non-woven textiles, ropes, fabrics, apparel, curtains, bags, tarpaulins, and flags
• Hats and headgear
• Certain glassware
• Certain gold and silver and imitation jewelry
• Direct reduced iron
• Refined lead
• Certain hand tools and saw blades
• Razors, locks, and metal statuettes
• Machinery including certain hydraulic turbines, refrigerating and freezing equipment, filtering machinery, packing and closing machinery, sandblasting machines, certain lifting and handling equipment, and vacuum cleaners
• Electronics including smartphones, video recording apparatus, solid state storage devices, television and other cameras, radar apparatus, computer and other video monitors, digital projectors, and fiber optic cables
• Motorcycles
• Boats and related equipment such as docks
• Optical measuring equipment
• Seats, chairs, and other furniture
• Chandeliers and other lighting fixtures
• Toys and certain games, including video game consoles
• Christmas ornaments and other festive articles
• Golf equipment, ice skates, general exercise equipment, swimming pools sporting gear and fishing rods
• Certain art, antiques, and collectors’ items

What Importers Should Do Now

Companies importing Canadian-origin goods should promptly review whether their products fall within the covered tariff classifications, assess potential duty exposure beginning August 19, and evaluate inventory, sourcing, and shipment timing strategies. Importers should also monitor forthcoming guidance from U.S. Customs and Border Protection regarding implementation of the new measures.