US tariffs on Canada 50% duties threatened

Research evidence excerpt

US tariffs on Canada 50% duties threatened

21 July 2026

US tariffs on Canada Economics

50% duties threatened Global

◆ President Trump announced new tariffs of 50% a range of Canadian goods… Shanella Rajanayagam

Senior Trade Economist

◆ …using powers under Section 338, which has never been used before HSBCshanella.l.rajanayagam@hsbc.coBank plc

+44 20 3268 4118

◆ New tariffs could be used as negotiating leverage; risk of legal challenge if

implemented

Facts

President Trump has announced additional tariffs of up to 50% on USD20bn worth of US imports from

Canada, effective from 19 August 2026, over discrimination against US business/trade in three categories

(autos, dairy, alcoholic beverages).

The latest actions use powers under Section 338 of the Tariff Act of 1930 (which has never been used in

its current form).

It comes against a backdrop of USMCA review talks (not yet started formally with Canada) and the US’s

10% Section 122 tariff expiry on Friday.

There is a risk that these duties could be challenged legally if implemented.

Implications

President Trump announced tariffs of 50% on Canadian goods using powers under Section 338 of the

Tariff Act of 1930. The new duties are set to take effect on 19 August 2026 (30 days after the

announcement).

President Trump signed three proclamations under Section 338 in response to three categories of

Canadian trade restrictions: 1) national tariff-rate quotas on US-made vehicles, 2) tariff-rate quotas for US

dairy products, and 3) provincial governments’ bans on US alcoholic beverages.

Each Section 338 proclamation imposes tariffs on a different set of Canadian imports ranging from alcohol

to clothing to dairy to electronics to hockey sticks. Unlike some previous US tariff announcements, goods