President Trump imposed 50% tariffs on approximately USD 20 billion of Canadian imports on 20 July 2026 under Section 338 of the Tariff Act of 1930, marking the statute's first use in nearly a century, with the duties set to take effect on 19 August 2026.
President Donald Trump announced 50% tariffs on approximately USD 20 billion of Canadian imports on 20 July 2026, marking the first use of Section 338 of the Tariff Act of 1930 in nearly a century.
The action targets a wide array of products—motor vehicles, alcohol, hockey sticks, cement, dairy, swimming pools, furniture, and wigs—set to take effect on 19 August 2026.
The tariffs affect about 5.2% of the USD 382 billion in goods the US imported from Canada in 2025, according to the US Census Bureau. Trump administration officials framed the move as retaliation for what they called Canada’s discriminatory practices against American-made cars, alcohol, and dairy goods.
A rarely invoked precedent
Section 338 of the 1930 Tariff Act permits presidents to impose punitive duties of up to 50% against countries deemed to have discriminated against US exports. Trump’s use is the first documented application of the statute since it passed roughly 100 years ago. Trade experts note the irony: Section 338 was designed to prevent discriminatory tariff treatment, yet Trump is wielding it to retaliate against Canadian tariffs that Canada itself imposed in response to earlier US tariff actions.
The specifics of Canada’s complaint
Trump cited Canada’s supply management system for dairy and its auto tariffs and quotas that treat US vehicles differently from those from other countries. Canada’s Prime Minister Mark Carney countered that his government had simply matched US auto sector tariffs that violated the US-Mexico-Canada Agreement (USMCA).
He added that Canada had made comprehensive proposals to resolve the disputes but that Trump’s earlier tariffs had raised costs for American families.
Several Canadian provinces halted sales of US alcohol in response to previous US tariffs. US motor vehicle imports from Canada fell 22%, and alcohol imports dropped 81% over the past year. Exemptions from the new tariffs include energy, potash, fish, critical minerals, and goods already covered under Section 232 tariffs.
The same day, USTR Ambassador Jamieson Greer stated that President Trump exercised his authority under Section 338 of the Tariff Act of 1930 to impose additional 50% tariffs on Canada to offset Canada’s discriminatory treatment of US exports.
“While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect US industry in national-security sensitive sectors,” said Ambassador Greer.
“Specifically, Canada has taken US alcohol products off Canadian shelves, given better market access to dairy products from the European Union, and has put a cap on US vehicle exports to Canada from companies reshoring to the United States. Today, President Trump took decisive action to hold Canada accountable for its retaliation and discrimination, delivering on his promise to correct trade imbalances and ensure fairness for American workers, farmers, and businesses.”
