Trump directs removal of Canadian-origin goods from U.S. federal procurement and raises Section 338 tariffs on certain Canadian products.

1. What changed

A. Federal procurement restrictions on Canadian-origin goods

• President Trump signed a Presidential Memorandum directing:
• The Director of the Office of Management and Budget (OMB) and the United States Trade Representative (USTR), in coordination with the Federal Acquisition Regulatory (FAR) Council, to identify and take all steps toward removing or otherwise making non-available for purchase Canadian-origin items in the federal civil procurement system.
• USTR to monitor Canada’s continued treatment of U.S.-origin goods in Canadian government procurement.
• This is a policy action targeting Canadian-origin goods in U.S. federal civil government procurement, effectively rolling back preferential access previously enjoyed by Canadian suppliers.

B. Tariff increases under Section 338 of the Tariff Act of 1930

• On September 8, 2026, President Trump banned and increased tariffs on certain products under Section 338 of the Tariff Act of 1930.
• These actions are explicitly tied to Canada’s alleged discriminatory treatment of U.S. exports of alcoholic beverages, dairy, and motor vehicles.
• While the fact sheet does not provide specific tariff lines or numerical duty rates, it confirms that:
• Certain products (not fully enumerated here) are now banned from import, and
• Tariffs on certain other products have been increased under Section 338.

2. Affected products

A. Procurement-related impact

• Scope: Canadian-origin items in the federal civil procurement system.
• Product coverage: Not limited to specific HTS codes in the fact sheet; it potentially covers a broad range of Canadian-origin goods that are purchased by U.S. federal civil agencies.
• Examples (illustrative categories, not exhaustive, based on typical federal procurement):
• Industrial and construction materials of Canadian origin
• IT hardware and software of Canadian origin
• Vehicles, machinery, and equipment of Canadian origin
• Food and agricultural products of Canadian origin used in federal programs

B. Tariff-related impact under Section 338

• The fact sheet identifies the sectors that triggered the action:
• Alcoholic beverages
• Dairy products
• Motor vehicles
• The document does not list specific HTS codes or detailed product descriptions. Importers should expect that certain Canadian-origin products in these sectors are now subject to:
• Import bans (for some items), and/or
• Increased tariffs under Section 338.

3. Rate changes

• The fact sheet confirms that tariffs were “increased” on certain products under Section 338 but does not provide:
• Previous (old) duty rates
• New duty rates
• Specific percentage increases
• Any Chapter 99 or HTS references
• As a result, importers must consult the implementing Federal Register notice(s), USTR announcements, or CBP guidance for:
• Exact HTS subheadings covered
• Specific ad valorem or specific duty rates
• Any additional duties (e.g., surtaxes) and their calculation basis

4. Dates

• September 8, 2026: Date on which President Trump banned and increased tariffs on certain products under Section 338 of the Tariff Act of 1930.
• September 16, 2026: Date of the Presidential Memorandum and fact sheet announcing:
• Direction to OMB, USTR, and the FAR Council to identify and remove/make non-available Canadian-origin items from federal civil procurement.
• Effective dates:
• The fact sheet does not specify the exact effective date for the procurement restrictions or the detailed effective date for each tariff measure.
• For compliance purposes, importers and contractors should assume that:
• Section 338 tariff changes are effective as of the date specified in the underlying Presidential action or Federal Register notice (likely on or after September 8, 2026).
• Procurement restrictions will take effect as implementing regulations or guidance are issued by OMB, USTR, and the FAR Council.

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

A. For importers of Canadian-origin goods (general)

1) Identify exposure

• Review import data for Canadian-origin goods, with particular focus on:
• Alcoholic beverages
• Dairy products
• Motor vehicles and related parts
• Flag all Canadian-origin products that may be:
• Sold directly or indirectly to U.S. federal civil agencies, or
• Potentially covered by Section 338 tariff increases or bans.

2) Verify current duty treatment

• Check CBP and USTR resources for:
• Any new Section 338 measures applicable to Canadian-origin goods.
• Any additional duties or import bans on specific HTS lines.
• Confirm whether any preferential tariff treatment (e.g., under USMCA-equivalent provisions) is still applicable or has been effectively overridden by Section 338 measures.

3) Update landed cost and pricing

• For products subject to increased tariffs:
• Recalculate landed cost and margin impacts.
• Adjust pricing, contracts, or sourcing strategies as needed.
• For products potentially subject to bans:
• Halt new purchase orders where import admissibility is uncertain.
• Explore alternative sourcing from non-Canadian suppliers.

B. For companies supplying the U.S. federal civil government

1) Assess procurement eligibility of Canadian-origin content

• Review all products and components supplied to federal civil agencies to determine:
• Whether they are of Canadian origin under applicable origin rules.
• Whether Canadian-origin content is substantial enough to risk disqualification once the Memorandum is implemented.

2) Adjust sourcing and contracts

• Where feasible, shift sourcing from Canadian-origin to U.S. or other non-Canadian sources for:
• End products sold to federal agencies.
• Critical components that may determine origin.
• Review and, if necessary, renegotiate federal contracts and subcontracts to:
• Address potential non-availability of Canadian-origin items.
• Include contingency clauses for origin-related eligibility.

3) Strengthen origin documentation

• Ensure robust documentation to substantiate non-Canadian origin where relevant, including:
• Bills of materials and supplier declarations.
• Certificates of origin and production records.
• Prepare to respond to contracting officer inquiries regarding origin and compliance with any new procurement restrictions.

C. For customs brokers and trade compliance teams

1) Monitor regulatory publications

• Closely track:
• Federal Register notices implementing Section 338 measures against Canada.
• CBP Cargo Systems Messaging Service (CSMS) messages on new duty requirements or bans.
• FAR and agency-level procurement guidance implementing the Presidential Memorandum.

2) Update classification and entry processes

• Once specific HTS lines are published:
• Update internal classification databases to flag affected Canadian-origin HTS codes.
• Configure systems to apply additional duties or reject entries where bans apply.
• Train entry staff to:
• Recognize affected Canadian-origin products.
• Apply any required Chapter 99 or special program indicators once published.

3) Communicate with clients

• Proactively inform importer clients that:
• Section 338 measures are in place against certain Canadian products.
• Federal procurement restrictions on Canadian-origin goods are forthcoming.
• Recommend that clients:
• Conduct origin and supply chain reviews.
• Budget for potential duty increases and procurement eligibility changes.

6. References

Note: The fact sheet itself does not provide URLs, but the following are the logical sources to consult for operative details:

• White House Fact Sheet (September 16, 2026):
• Title: “Fact Sheet: President Donald J. Trump Restores Reciprocity in Government Procurement”
• Source: The White House (https://www.whitehouse.gov) – search by title and date.

• Presidential Memorandum on Canadian-origin goods in federal procurement:
• Available via the White House Presidential Actions page and/or Federal Register.
• Federal Register: https://www.federalregister.gov – search for the memorandum title and date (September 16, 2026).

• Section 338 Tariff Action (September 8, 2026):
• Implementing documents likely published by USTR and/or in the Federal Register.
• USTR: https://ustr.gov – search for Section 338 actions against Canada.
• Federal Register: search for “Section 338 Tariff Act of 1930” and “Canada” around September 8, 2026.

• U.S. Customs and Border Protection (CBP):
• CSMS and guidance on implementation of new duties or bans: https://www.cbp.gov

7. HTS metadata

• The fact sheet does not list any specific HTS headings, subheadings, or Chapter 99 provisions.
• Therefore, the HTS metadata array is empty pending publication of detailed implementing measures.

HTS codes explicitly stated in the source: []