New 50% Section 338 tariffs will apply to broad categories of Canadian imports (excluding energy and certain goods) 30 days after signing.

1. What changed

The President signed three Proclamations under Section 338 of the Tariff Act of 1930 imposing additional 50% tariffs on certain goods of Canada. Each proclamation covers a different set of Canadian-origin products. These are new, additional tariffs applied specifically to imports from Canada and are intended to offset Canada’s discriminatory treatment of U.S. exports (cars, alcohol, dairy). The measures apply regardless of whether the goods qualify as originating under the U.S.-Mexico-Canada Agreement (USMCA).

The tariffs will take effect 30 days after the date of signing of the proclamations.

2. Affected products

The fact sheet describes the affected products in broad terms but does not list specific HTS codes. It indicates that the three Section 338 proclamations each impose a 50% tariff on a different set of Canadian imports, including:

• Alcoholic beverages (e.g., wine)
• Sporting goods (e.g., hockey sticks)
• Construction materials (e.g., cement)
• Other unspecified Canadian-origin products covered by the proclamations

Explicit exclusions:

• Energy products
• Potash
• Products already subject to tariffs under Section 232 (e.g., certain steel, aluminum, copper, trucks and automobiles, timber, lumber, pharmaceuticals, as referenced generally)
• Certain other goods, including fish and critical minerals

Because the fact sheet is high-level, the precise product scope and HTS coverage will be defined in the three Section 338 proclamations themselves, which must be consulted for line‑item details.

3. Rate changes

• New additional duty rate: 50% ad valorem on covered Canadian-origin goods.
• Previous rate: Standard MFN/USMCA rate (often 0% or lower than 50%), depending on the product; the fact sheet does not specify prior rates.
• Change: For all covered Canadian-origin products, the applicable duty rate will increase by an additional 50 percentage points (i.e., an extra 50% ad valorem) over the otherwise applicable rate.

The fact sheet does not specify whether the 50% is a standalone rate or an additional duty on top of existing rates, but the language “impose additional 50% tariffs” indicates an extra 50% duty applied to the covered Canadian imports.

4. Dates

• Proclamations signed: July 20, 2026 (per the fact sheet date).
• Effective date of new tariffs: 30 days after signing.
• Effective date: August 19, 2026 (assuming calendar days and no different specification in the proclamations).
• Duration/expiration: No sunset or expiration date is mentioned in the fact sheet; the tariffs remain in effect until modified or revoked by subsequent action.

Importers should verify the exact effective time (e.g., 12:01 a.m. EDT) and any phase-in rules in the official proclamations and subsequent CBP guidance.

5. Required actions for importers, brokers, and compliance teams

A. Determine product coverage

• Review the three Section 338 proclamations once published to identify:
• Exact HTS subheadings and product descriptions subject to the 50% tariffs.
• Any product-specific exclusions or carve-outs beyond those listed (energy, potash, fish, critical minerals, Section 232 products).
• Map your Canadian-origin product portfolio against the HTS lines listed in the proclamations.
• Pay particular attention to:
• Alcoholic beverages (including wine and possibly spirits/beer if listed).
• Sporting goods (e.g., hockey sticks and related equipment).
• Construction materials (e.g., cement and potentially related building materials if specified).

B. Update classification and duty calculation

• Ensure HTS classifications for Canadian-origin goods are accurate and current; misclassification could lead to underpayment or overpayment of the new 50% duty.
• Update internal tariff databases, ERP systems, and broker instructions to reflect the new 50% additional duty on covered Canadian HTS lines effective August 19, 2026.
• Confirm how the 50% duty is to be reported on CBP entry summaries (e.g., via specific Chapter 99 or other special program indicators once published in the proclamations or CBP guidance).

C. Review existing contracts and pricing

• Identify contracts for imports of covered Canadian goods that extend beyond the effective date.
• Assess who bears the cost of additional duties (seller vs. buyer) under existing INCOTERMS and contract language.
• Renegotiate pricing, duty-sharing, or sourcing terms where necessary to account for the 50% duty.

D. Supply chain and sourcing adjustments

• Evaluate alternative sourcing options from non-Canadian suppliers for affected products, especially where the 50% duty materially impacts landed cost.
• Consider shifting production or procurement to countries not subject to the Section 338 tariffs, while ensuring compliance with rules of origin and anti-circumvention principles.

E. Entry timing and inventory planning

• For shipments of covered Canadian goods already in transit or planned:
• Consider accelerating shipments and entry before the effective date where commercially and operationally feasible.
• Evaluate the impact of the 50% duty on post‑effective‑date arrivals and adjust order quantities accordingly.
• Review bonded warehouse and FTZ strategies:
• Determine whether admission into an FTZ or bonded warehouse before the effective date provides any duty planning opportunities, subject to CBP rules and the specific structure of the Section 338 measures.

F. Compliance documentation and recordkeeping

• Maintain documentation demonstrating country of origin (Canada vs. other countries) to correctly apply or avoid the Section 338 tariffs.
• For products potentially excluded (energy, potash, fish, critical minerals, Section 232‑covered items), retain supporting documentation and HTS classification analyses to substantiate exclusion from the 50% duty.
• Monitor for any subsequent CBP guidance, FAQs, or CSMS messages clarifying implementation details.

G. Risk management and communication

• Update internal risk assessments to reflect increased duty exposure on Canadian-origin goods.
• Communicate changes to internal stakeholders (procurement, finance, sales, logistics) and external partners (suppliers, customs brokers, 3PLs).
• Consider whether prior rulings (e.g., binding rulings on classification or origin) need to be revisited in light of the new tariffs.

6. References

The fact sheet references three Section 338 proclamations but does not provide direct links or numbers. For full legal and operational details, importers should consult:

• The White House fact sheet (source of this summary):
• https://www.whitehouse.gov (navigate to Fact Sheets; title: “Fact Sheet: President Donald J. Trump Imposes Additional Tariffs on Canada,” dated July 20, 2026)

• The three Presidential Proclamations under Section 338 of the Tariff Act of 1930:
• Available via the Federal Register and the White House website once published.
• Federal Register: https://www.federalregister.gov (search for “Section 338 Canada 50 percent tariffs” and the date July 20, 2026).

• U.S. Customs and Border Protection (CBP) implementation guidance:
• CBP Cargo Systems Messaging Service (CSMS): https://www.cbp.gov/trade/automated/cargo-systems-messaging-service
• CBP trade page: https://www.cbp.gov/trade

These documents will provide the definitive list of HTS codes, any Chapter 99 provisions, reporting instructions, and any product-specific exclusions or staging.

7. HTS metadata

The fact sheet does not list any specific HTS headings or subheadings. All HTS coverage will be defined in the three Section 338 proclamations and subsequent CBP guidance. Until those are available, importers should:

• Prepare to map their Canadian-origin HTS lines against the forthcoming lists.
• Focus on categories likely to be covered based on the narrative (alcoholic beverages, sporting goods like hockey sticks, cement and related materials, and other Canadian-origin goods identified in the proclamations).

HTS codes explicitly stated in the source: none.

8. Key takeaways

• A new 50% additional tariff will apply to specified Canadian-origin imports under three Section 338 proclamations, effective 30 days after July 20, 2026.
• The tariffs apply regardless of USMCA origin status and exclude energy, potash, fish, critical minerals, and products already covered by Section 232 tariffs, along with certain other goods.
• Importers must promptly review the proclamations, identify affected HTS lines, update systems and contracts, and consider sourcing and timing strategies to manage the significant duty impact.