President Trump Announces First-Ever Section 338 Tariffs on Certain Canadian Imports

President Trump has announced three separate presidential proclamations imposing an additional 50% ad valorem tariff on certain imports from Canada under Section 338 of the Tariff Act of 1930. The new duties are scheduled to take effect at 12:01 a.m. ET on August 19, 2026, and represent the first known use of Section 338 as the legal authority for imposing tariffs.

The three proclamations target Canadian products in response to what the administration describes as discriminatory trade practices affecting U.S. commerce in the dairy, alcoholic beverage, and motor vehicle sectors.

Overview of the Three Proclamations

1. Additional Duties on Certain Canadian Dairy Products

The first proclamation imposes a 50% additional tariff on designated Canadian dairy products. According to the White House, the action is intended to address Canada’s use of tariff-rate quotas (TRQs) for dairy imports, which the administration argues restrict access for U.S. dairy exporters.

Importers should review the accompanying annexes to determine whether their products and corresponding Harmonized Tariff Schedule (HTS) classifications are included in the affected list.

2. Additional Duties on Certain Canadian Alcoholic Beverages

The second proclamation imposes an additional 50% tariff on specified Canadian alcoholic beverage products. The administration states that the measure responds to Canada’s restrictions on the importation and sale of U.S. alcoholic beverages within Canadian markets.

As with the dairy proclamation, importers should carefully review the published annexes and HTS classifications to determine whether their shipments fall within the scope of the new duties.

3. Additional Duties on Certain Canadian Motor Vehicle Products

The third proclamation applies a 50% additional tariff to certain Canadian motor vehicle products.

According to the White House, this action is a response to Canada’s 25% tariff on imports of U.S. motor vehicles that do not qualify for preferential duty-free treatment under the United States-Mexico-Canada Agreement (USMCA).

Importers in the automotive supply chain should closely examine the published HTS classifications to determine whether imported vehicles or automotive components may be affected beginning August 19.

Effective Date

Unless otherwise specified in the proclamations, the additional duties will become effective at:

12:01 a.m. Eastern Time on August 19, 2026

Shipments entered for consumption, or withdrawn from warehouse for consumption, on or after the effective date may be subject to the additional duties if they fall within the scope of the applicable proclamation.

Historic Use of Section 338

One of the most significant aspects of these announcements is the legal authority used to implement them.

These proclamations rely on Section 338 of the Tariff Act of 1930, a provision that authorizes the President to impose additional duties on imports from countries determined to discriminate against U.S. commerce.

While Section 338 has existed for decades, it has never previously been used to impose tariffs, making these actions historically significant in U.S. trade policy.

Industry observers have also noted that the statute differs from other commonly used trade authorities, such as Section 301 or Section 232. According to reporting from International Trade Today, Section 338 does not establish a specific duration for these duties or provide statutory language describing when or how they must be removed, potentially creating additional uncertainty for importers if the tariffs remain in effect over an extended period.

What Importers Should Do

Businesses importing products from Canada should begin preparing well in advance of the August 19 implementation date. Recommended actions include:

• Reviewing the annexes accompanying each proclamation to determine whether imported products are covered.
• Confirming applicable HTS classifications with customs compliance teams or customs brokers.
• Evaluating the potential financial impact of the additional 50% duties on current and future shipments.
• Reviewing supply chain strategies and sourcing options where appropriate.
• Monitoring for additional guidance from U.S. Customs and Border Protection (CBP) regarding implementation procedures.

Radius International Will Continue Monitoring Developments

The implementation of Section 338 tariffs represents a notable development in U.S.-Canada trade relations and introduces a rarely used trade enforcement mechanism into active practice.

Radius International will continue monitoring these proclamations, any implementing guidance issued by U.S. Customs and Border Protection, and any additional regulatory updates that may affect importers. As more information becomes available, we will provide timely updates to help our customers remain informed and compliant in an evolving global trade environment.