President Trump Issues New Tariffs Against Imports from Canada

On July 20, 2026, President Trump issued a proclamation declaring the imposition of a new 50% tariff on goods from Canada under Section 338 of the Tariff Act of 1930, which “empowers the President to, among other things, impose duties on imports of a foreign country to offset the burden or disadvantage from a foreign country’s discrimination against or unequal imposition on the commerce of the United States."

In April 2025, Canada imposed a 25% surtax against imports of U.S. motor vehicles in response to punitive tariffs issued against Canadian imports into the United States under the International Emergency Economic Powers Act (IEEPA). The forthcoming Section 338 tariff identifies the motor vehicle surtax as “discrimination” and as an “unequal imposition,” as it targets the United States and not other foreign countries.

The Section 338 tariff is classified under secondary tariff number 9903.03.14 and will impose an additional 50% tariff on a wide range of Canadian goods identified in the Annex attached to the proclamation. The tariff is set to go into effect on August 19, 2026, and will not “stack,” i.e., apply on top of imports from Canada subject to the existing tariffs under Section 232 of the Trade Expansion Act of 1962 (such as the 232 tariffs against metals, pharmaceuticals, or lumber), nor will it apply to certain critical imports previously exempted from the 2025 IEEPA tariffs (e.g., energy, potash, critical minerals);  However, the Section 338 tariff will apply regardless of whether preferential treatment is claimed under the US-Mexico-Canada Agreement (USMCA).

The proclamation was followed by additional Section 338 tariffs specifically targeting alcoholic beverages and dairy products, each responding to Canadian counter-tariff “surtax orders” created in 2025 in the trade war between Canada and the United States. Both of these tariffs will also be assessed at 50% and will go into effect on August 19, 2026.

If you have questions about tariffs or would like to explore strategies to reduce their impact on your business operations, our team is here to help. Contact us today for a consultation at sales@allynintl.com.

Contributor: Andrew Dosher

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