On July 20, 2026, President Trump imposed 50% tariffs on a broad range of certain Canadian goods, including dairy and agricultural products, manufactured goods, alcoholic beverages, chemicals, cosmetics, wood and paper products, and hockey equipment. The tariffs will apply to goods qualified as originating under the U.S.-Mexico-Canada Agreement (USMCA), and they will not be eligible for any exemption.
The new tariffs are set to take effect on August 19, 2026, 30 days from the date of issuance.
July 20 Proclamations
The Trump administration issued three separate proclamations (July 20 Proclamations), invoking section 338 of the 1930 Tariff Act:
- The Dairy Proclamation: States that Canada discriminates against U.S. dairy products (particularly cheese), as compared to those from member states of the European Union.
- The Motor Vehicle Proclamation: States that Canada discriminates against U.S. motor vehicles and applies a tariff scheme to U.S.-origin motor vehicles that is not applied against any other imported motor vehicle.
- The Alcoholic Beverages Proclamation: States that Canada discriminates against U.S. alcoholic beverages, with Ontario and Quebec stopping all purchasing and distribution of them.
Section 338 of 1930 Tariff Act
The 1930 Tariff Act, more commonly known as the Hawley-Smoot Tariff Act, was signed into law by President Herbert Hoover while the U.S. was in the throes of the Great Depression — cue all Gen X and Ferris Bueller’s Day Off movie buffs). The intent of the 1930 Tariff Act was to protect U.S. agriculture and prop up domestic pricing. The new levies were layered on top of the already high tariff environment of the 1920s.
The tariffs are widely viewed as having harmed the U.S. economy and as having contributed to retaliatory trade measures during the Great Depression. In 1934, President Franklin D. Roosevelt rolled back the Hawley-Smoot Tariffs.
What’s Next for Importers of Canadian Goods
President Trump’s invocation of the 1930 Tariff Act to impose tariffs is a novel approach in recent times. Many legal and public policy scholars question the President’s authority to impose tariffs under section 338, and legal challenges are widely anticipated.
The July 20 Proclamations continue to highlight the administration’s commitment to tariffs as a central tool of its trade policy.
Importers of record should continue to track their tariff burden in the Customs and Border Protection Automated Commercial Environment (ACE) portal. For non-importers of record, updating systems to separately identify and track invoices that itemize the pass-through costs of tariffs continues to be recommended practice.
Your Guide Forward
Cherry Bekaert established a cross-functional team of professionals to help advise and support our clients with the downstream effects when tariffs and tariff refunds impact tax, accounting, audit and financial reporting functions (including automation and systems).
If you have questions about preserving your rights or about any other legal or trade implications that may exist, we recommend reaching out to appropriate legal counsel.
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