Section 338 duties on Canadian vehicles, dairy and alcohol (50%)
Three proclamations of July 20, 2026 (Nos. 11046, 11047 and 11048) invoke Section 338 of the Tariff Act of 1930 — a rarely used provision that lets the President answer foreign discrimination against U.S. commerce with duties of up to 50% — to impose an additional 50% ad valorem duty on annex-listed Canadian alcoholic beverages, dairy products and motor vehicles. Proclamation 11056 of August 18 delayed the start by three days while Canada signalled it would remove the measures, so duties apply to goods entered on or after 12:01 a.m. ET August 22, 2026; no further suspension has been published. Articles already subject to Section 232 duties are excluded, so vehicles covered by the Section 232 auto tariffs sit outside this action; the annexes define exactly which lines are covered.
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Timeline
- In effectFederal Register
50% duties take effect
After a three-day delay, the additional 50% duty applies to annex-listed Canadian goods entered for consumption on or after 12:01 a.m. ET August 22, 2026.
Official sources - AnnouncedExecutive order
Start delayed three days during negotiations
Proclamation 11056 suspends the three Section 338 actions for three days, moving the effective date from August 19 to August 22, 2026, because Canada "has expressed a commitment to remove the discriminations". Any duties collected in the gap are refunded under standard CBP procedures.
Official sources - AnnouncedExecutive order
Three Section 338 proclamations signed
Proclamations 11046 (alcoholic beverages), 11047 (dairy) and 11048 (motor vehicles) find Canadian discrimination against U.S. commerce and set an additional 50% duty from August 19, 2026.
Official sources
Official sources
- Proclamation 11048: duties on Canadian motor vehicles · 91 FR 46663
- Proclamation 11047: duties on Canadian dairy
- Proclamation 11046: duties on Canadian alcoholic beverages
- Proclamation 11056: temporary suspension of the Section 338 duties · 91 FR 54789
Status verified 09/10/2026
Related measures
IEEPA border tariffs on Canada (struck down)
25% tariffs on non-USMCA-qualifying Canadian goods (10% on energy and potash), imposed March 2025 over drug-trafficking concerns after a one-month pause. USMCA-originating goods were exempted days after the tariffs took effect. The Supreme Court's February 2026 IEEPA ruling voided the program; paid duties are potentially refundable.
USMCA joint review (held July 1, 2026 — no extension confirmed)
At the first six-year joint review on July 1, 2026 the United States did not agree to renew USMCA in its current form, while Canada and Mexico supported a 16-year extension. The agreement stays fully in force and duty-free preference is unchanged, but it now moves to annual joint reviews under Article 34.7 until the three parties confirm an extension or the agreement expires on July 1, 2036. Bilateral U.S.–Mexico negotiating rounds continue; every North American supply chain that relies on USMCA preference now carries year-to-year renewal risk.
Section 301 forced-labor tariffs on 60 economies (10% / 12.5%)
On July 24, 2026 — the day the Section 122 surcharge lapsed — USTR imposed additional duties of 10% or 12.5% ad valorem on products of 60 economies under Section 301, concluding investigations into each economy's failure to impose or enforce a ban on imports made with forced labor. The rate is set per economy: for example Canada, Mexico, India, the United Kingdom, Malaysia and Indonesia pay 10%; China, Vietnam, Brazil and Thailand pay 12.5%; the EU and Taiwan pay 10% and Japan, Korea and Switzerland 12.5%, each assessed net of the MFN rate. Articles subject to Section 232 duties are exempt, as are annex-listed products for several economies, and goods loaded before July 24 that entered before July 28, 2026.
Current rate: 10% or 12.5% additional ad valorem by economy (EU and Taiwan 10%, Japan, Korea and Switzerland 12.5%, each net of the MFN rate); goods subject to Section 232 duties and annex-listed products are exempt