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Canada's Section 338 duties escalate to an import ban

8 September 2026

The President signed five proclamations on 8 September 2026 escalating the Section 338 action against Canada from additional duties to exclusion from importation.12 Three of them direct that products of Canada “are excluded from importation into the United States, effective with respect to goods imported on or after 12:01 a.m. eastern time on September 29, 2026,” covering the same categories the July proclamations reached — alcoholic beverages, dairy and motor vehicles.13 Two companion proclamations modify which products remain subject to the 50 percent duty, effective 15 September.2 The duties themselves took effect on 22 August, and Canada’s counter-tariffs took effect at 12:01 a.m. on 8 September, the day these were signed (see Canada matches the Section 338 duties, dollar for dollar).14

  1. The escalation runs on the statute’s second tier, which requires a finding the first did not. Section 338(b) authorises exclusion only where the President finds a country “has not only discriminated against the commerce of the United States, as aforesaid, but has, after the issuance of a proclamation as authorized in subdivision (a) of this section, maintained or increased its said discriminations.”5 Recital 6 of the dairy proclamation makes that finding: that Canada has, “after the issuance of Proclamation 11047 and after the additional ad valorem duties imposed in Proclamation 11047 became effective, maintained the discriminations against the commerce of the United States described in Proclamation 11047.”1

  2. Each ban carries its own fallback if a court strikes it. Paragraph 9(b) provides that “[i]f the import ban imposed in this proclamation is invalidated in whole or in part as to any import, then the 50 percent ad valorem duty imposed in Proclamation 11047 shall apply to the import to which the invalidated import ban or the invalidated part of the import ban had applied before its invalidation.”1 The proclamation states that this provision, “including its operative effect if triggered, is consistent with the public interests and the interests of the United States.”1 The duty is written to revive on the ban’s defeat rather than to fall with it.1

  3. Two dates apply, and goods already on the water are treated differently from goods still to come. The scope modifications bite for goods “entered for consumption, or withdrawn from warehouse for consumption,” on or after 15 September; the bans apply to “goods imported on or after” 29 September.21 Products “imported, but not yet entered for consumption, or withdrawn from warehouse for consumption, prior to September 29, 2026, will remain subject to the 50 percent duty rate established by Proclamation 11047.”1

  4. Both governments have now put a date on the breakdown, and they do not agree. Recital 3 states that “[o]n August 21, 2026, Canada reneged on its commitment, ceased negotiating in good faith, and did not remove the discrimination.”1 The Department of Finance Canada said on 25 August that “the U.S. proposed new terms that were not in Canada’s best interest” and that “Canada therefore suspended negotiations rather than accepting a bad deal.”6 The suspension proclamation of 18 August had rested on Canada having “expressed a commitment to remove” the measures.4

Footnotes

  1. Proclamation of 8 September 2026, “Excluding Certain Canadian Products from Importation into the United States in Response to Continued Discrimination Against the Commerce of the United States with Respect to Dairy.” Not yet assigned a proclamation number or published in the Federal Register when this was written. Recitals 1-4 (the history of Proclamation 11047 of 20 July, the three-day suspension by Proclamation 11056 of 18 August, and the duties taking effect at 12:01 a.m. on 22 August); recital 3 (Canada “reneged”); recital 5 (senior executive branch officials’ opinion that “an import ban on certain Canadian products currently subject to the additional ad valorem duties imposed in Proclamation 11047 is consistent with the interests of the United States and the public interests”); recital 6 (the section 338(b) finding); recital 9 (the description of section 338, including that it “authorizes the President to exclude from importation articles of the foreign country if the foreign country maintains or increases the discrimination”); ¶(1) (the exclusion and its 29 September effective date); ¶(2) (goods imported but not entered); ¶(3) (the relationship to a companion “Modifying the Scope” proclamation with respect to dairy); ¶(5) and ¶(6) (CBP implementation and HTSUS modification by Federal Register notice); ¶(7) (“The United States Trade Representative is delegated the President’s approval authority in 19 U.S.C. 1338(h)”); ¶(9)(b) (severability and the duty fallback). https://www.whitehouse.gov/presidential-actions/2026/09/excluding-certain-canadian-products-from-importation-into-the-united-states-in-response-to-continued-discrimination-against-the-commerce-of-the-united-states-with-respect-to-dairy/ ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8 ↩9 ↩10

  2. Proclamation of 8 September 2026, “Modifying the Scope of Products of Canada Subject to the Additional Duties Imposed to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Alcoholic Beverages,” concerning Proclamation 11046 of 20 July 2026. ¶(1) adds the products in Annex I, Part A to the 50 percent duty and removes those in Annex I, Part B, effective 15 September 2026, and provides that the duties “shall apply in addition to duties imposed pursuant to section 232 of the Trade Expansion Act of 1962.” Recital 5 records the officials’ opinion that modifying the scope “would still offset the burden or disadvantage on U.S. commerce while better serving the public interest.” https://www.whitehouse.gov/presidential-actions/2026/09/modifying-the-scope-of-products-of-canada-subject-to-the-additional-duties-imposed-to-offset-canadian-discrimination-against-the-commerce-of-the-united-states-with-respect-to-alcoholic-beverages/ ↩ ↩2 ↩3

  3. The White House presidential-actions listing carries five Canada proclamations dated 8 September 2026: three excluding products from importation, with respect to alcoholic beverages, dairy and motor vehicles, and two modifying the scope of the duties, with respect to alcoholic beverages and motor vehicles. Paragraph (3) of the dairy exclusion refers to a “Proclamation of September 8, 2026 (Modifying the Scope of Products of Canada Subject to the Additional Duties Imposed To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Dairy),” which does not appear on the listing, on its second page, or in a site search, checked 9 September 2026. Six proclamations are described; five are published. https://www.whitehouse.gov/presidential-actions/ ↩

  4. Proclamations 11046, 11047 and 11048 of 20 July 2026 imposed additional 50 percent duties on Canadian alcoholic beverages, dairy and motor vehicles, originally effective 19 August; Proclamation 11056 of 18 August moved that date to 22 August, resting on reports that Canada “has expressed a commitment to remove the discriminations or unreasonable and unequal impositions at issue.” See Three Section 338 proclamations impose 50% duties on Canadian autos, alcohol and dairy and Canada’s Section 338 duties are ‘suspended’ by moving their start date three days. ↩ ↩2

  5. Section 338 of the Tariff Act of 1930, 19 U.S.C. § 1338. Subsection (a) authorises additional duties not exceeding 50 percent ad valorem; subsection (b), “Exclusion from importation,” is quoted in the body; subsection (c) permits the President to “suspend, revoke, supplement” a proclamation whenever the public interests require; subsection (h) provides that “[t]he Secretary of the Treasury with the approval of the President shall make such rules and regulations as are necessary for the execution of such proclamations.” https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title19-section1338&edition=prelim ↩

  6. Department of Finance Canada, “Canada announces targeted countermeasures and substantive support for workers and businesses in response to U.S. tariffs,” news release, 25 August 2026. See Canada matches the Section 338 duties, dollar for dollar. https://www.canada.ca/en/department-finance/news/2026/08/canada-announces-targeted-countermeasures-and-substantive-support-for-workers-and-businesses-in-response-to-us-tariffs.html ↩

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