Section 338 invoked for first time in decades
President Donald Trump on July 21 imposed 50% tariffs on most Canadian goods, invoking Section 338 of the 1930 Tariff Act — a law that gives the president power to impose duties of up to 50% when another country discriminates against American products. The tariffs target Canadian auto exports, alcoholic beverages, and dairy products, three sectors the White House described as having "unfair barriers" against US goods. The tariffs take effect August 19.
Canada pushes back without retaliation
Canadian Prime Minister Mark Carney said Canada believes in free and fair trade, noting the country has signed more than 20 new economic and security partnerships. Unlike China, Canada did not retaliate with counter-tariffs in response to the earlier April 2025 tariffs — a fact US Trade Representative Jamieson Greer highlighted as evidence that Canada was receiving favorable treatment compared to other nations. Several Democratic lawmakers had previously proposed repealing Section 338, warning Trump could use it to destabilize the economy.
Global trade implications
The move represents the steepest tariff increase since the Supreme Court struck down Trump's most sweeping duties earlier this year. CNN called the tariffs "a warning to the rest of the world," as Trump also announced a new baseline tariff on nearly 60 other nations over alleged forced labor practices.