Overview
On July 20, 2026, President Trump signed three supplementing presidential proclamations under Section 338 of the Tariff Act of 1930 (Section 338 Tariffs), which imposes a 50 percent import tariff on certain products from Canada.
The new tariffs will go into effect on August 19, 2026.
Importers should promptly review affected products, evaluate available exemptions, and assess potential cost and supply-chain impacts.
Which Products Are Subject to the New Canada Tariffs?
- Each Section 338 tariff covers a different set of Canadian imports, covering products ranging from wine to hockey sticks. The full list of products covered are listed in Annex I of the proclamation with respect to motor vehicles, the proclamation with respect to alcoholic beverages, and the proclamation with respect to dairy.
- Tariffs apply to all covered goods regardless of whether the good originates under the U.S.-Mexico-Canada Agreement (USMCA).
Which Products Are Exempt From the New Canada Tariffs?
The following products are exempt from the new tariffs on Canada imports:
- All products currently subjected to Section 232 tariffs, which includes:
- Aluminum, steel, and copper products including derivative aluminum or derivative steel articles;
- Passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks;
- Parts of passenger vehicles and parts of light trucks;
- Medium and heavy-duty vehicles (including parts), buses, and other vehicles;
- Wood products;
- Semiconductors, patented pharmaceuticals, and qualifying civil aircraft and aircraft parts.
- Goods such as critical minerals.
- Goods properly claimed under provisions of Chapter 98 and based on the restriction applicable to such subheadings.
What U.S. Importers Need to Know About the Canada Tariffs
The new Section 338 tariffs represent a significant shift in U.S.-Canada trade relations and may substantially increase costs for importers of affected goods. Importers should consider taking the following actions:
- Review product classifications. Check your product against the exemption categories using your product’s HTSUS code.
- Watch for retaliatory measures. Watch for Canada’s retaliation as the Canadian government is likely to pursue countermeasures under its own reciprocal-tariff law unless a deal is reached within the next 30-days when the tariffs go into effect.
Early planning before the August 19, 2026 effective date may help mitigate increased duty costs and minimize supply-chain disruptions.
