- Lead. President Trump signed three presidential proclamations on Monday invoking Section 338 of the Tariff Act of 1930—a provision unused in a major trade action for nearly a century—to impose additional 50% tariffs on approximately $20 billion of Canadian imports.
- Fact. The targeted goods represent 5.2% of all US imports from Canada and include wine, cement, dairy, clothing, and furniture; oil, gas, critical minerals, and potash are exempt. The tariffs take effect in 30 days.
- Stake. Canadian Prime Minister Mark Carney called the measures “the latest in a series of unilateral US trade actions” that violate the CUSMA trade agreement, signalling Ottawa intends to contest rather than absorb the duties.
Why Section 338?
Section 338 of the Tariff Act of 1930 authorises the president to raise duties on goods from any country found to “discriminate against American commerce.” The statute predates the World Trade Organisation, the General Agreement on Tariffs and Trade, and every major multilateral trade framework the United States has joined since the Second World War. Monday’s use appears to be the first invocation of the provision in a major trade action in nearly a century, giving the proclamations an unusual legal novelty alongside their economic weight.
The White House cited Canada’s “discriminatory treatment” of American alcohol, automobiles, and dairy products as the trigger. US Trade Representative Jamieson Greer stated: “Canada has taken US alcohol products off Canadian shelves, given better market access to dairy products from the European Union.” The US-Canada merchandise trade deficit reached $46.4 billion in 2025. Al Jazeera reported the full product list and administration rationale Monday.
What the Tariffs Cover
The new 50% duties apply to an eclectic list of Canadian goods: wine, cement, dairy products, furniture, clothing, swimming pools, fishing rods, seeds, hockey sticks, and wigs. The affected goods represent roughly $20 billion of Canadian imports—about 5.2% of the approximately $380 billion the United States sources from Canada each year. Explicitly exempt are oil, natural gas, potash, and critical minerals, as well as any product already subject to sector-specific tariffs. Canada already pays 25% tariffs on steel and aluminium exports to the US, a 10% levy on softwood lumber, and a 12.5% forced-labour surcharge on lumber introduced last month.
The breadth of the exemptions signals that the administration calculated the risk of direct energy-price pass-through as politically unacceptable. The 30-day delay before implementation creates a window for negotiations, mirroring the pattern from earlier rounds of tariff threats that were partially rolled back after talks.
Ottawa’s Response and the CUSMA Backdrop
Prime Minister Carney issued a statement describing the tariffs as a violation of the Canada-United States-Mexico Agreement—which Washington declined to renew last year, forcing the treaty into an annual review cycle. Carney said Canada “stands ready to engage intensively to address outstanding issues for the benefit of both our peoples and economies” but did not announce retaliatory measures. The measured tone leaves space for negotiation while allowing Ottawa to frame any eventual counter-tariffs as a reluctant response to American provocation.
Canada is not alone in facing escalating US tariff pressure. The administration has deployed steep duties against multiple trading partners this year, but Monday’s use of Section 338—a statute that has been dormant for decades—suggests the legal toolkit being assembled is expanding beyond the more commonly invoked national-security and trade-deficit provisions.