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On July 20, 2026, President Trump issued three Presidential Proclamations pursuant to Section 338 of the Tariff Act of 1930, each imposing an additional 50% ad valorem duty on certain goods of Canada in response to Canadian trade practices that the administration deemed discriminatory in the motor vehicle, dairy, and alcoholic beverage sectors.
Key points
- New 50% duty: Each proclamation imposes an additional 50% ad valorem duty on specified Canadian origin products listed in the respective annexes. This duty stacks on top of existing tariffs and charges, including MFN duties and any special tariffs, and applies even where goods qualify for USMCA preferential treatment.
- Effective date: The additional duties apply to covered Canadian origin goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern Time on August 19, 2026.
- Sectors targeted:
- Motor vehicles: Products linked to Canada’s United States Surtax Order (Motor Vehicles 2025), which the U.S. alleges discriminates against U.S. motor vehicle exports.
- Dairy: Products tied to Canadian TRQ allocation practices that allegedly favor EU over U.S. dairy under CETA versus USMCA.
- Alcoholic beverages: Products associated with Canadian policies that allegedly restrict U.S. alcoholic beverage access relative to other trading partners.
- Exclusions: The proclamations provide that the Section 338 duties do not apply to goods already subject to Section 232 tariffs or to aircraft covered by the WTO Agreement on Trade in Civil Aircraft (other than unmanned aircraft).
Official Proclamations and Product Annexes
We recommend reviewing the annexes to each proclamation, which list the affected HTSUS tariff lines, to determine whether your goods may be subject to the additional 50% duty:
- Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Motor Vehicles
- Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Dairy:
- Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Alcoholic Beverages
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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