New U.S. tariffs on certain Canadian goods take effect August 19, 2026
Date of publication: July 22, 2026.
Overview
On July 20, 2026, President Donald J. Trump signed three presidential proclamations imposing new additional 50% ad valorem tariffs on certain products of Canada. The new duties are being imposed under Section 338 of the Tariff Act of 1930, which authorizes the President to impose duties to offset burdens or disadvantages caused by a foreign country's discrimination against U.S. commerce.
The tariffs are scheduled to take effect for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern time on August 19, 2026.
The actions cover three areas of Canadian trade policy that the Administration says disadvantage U.S. exports, including motor vehicles, alcoholic beverages and dairy products.
The White House stated that each proclamation imposes a 50% tariff on a different set of Canadian imports, covering products such as wine, hockey sticks, and cement, and that the tariffs apply to covered goods regardless of whether the goods qualify as originating under the United States-Mexico-Canada Agreement (USMCA).
What products are affected?
The new duties apply only to certain products of Canada identified in Annex II to each proclamation. Importers should review the applicable Annex II and related Harmonized Tariff Schedule of the United States (HTSUS) modifications to determine whether a product is covered.
According to the White House fact sheet, covered goods include products "ranging from wine to hockey sticks to cement." The Administration also stated that the tariffs will not apply to energy, potash, products already subject to Section 232 tariffs, and certain other goods such as fish or critical minerals.
Importantly, the proclamations state that the new 50% duties are in addition to any other applicable duties, taxes, fees, exactions, and charges, unless otherwise provided in the proclamation or its annexes. However, the proclamations exclude articles subject to duties under Section 232 and articles, other than unmanned aircraft, subject to the WTO Agreement on Trade in Civil Aircraft.
Effective date
The additional duties apply to covered Canadian goods that are entered for consumption, or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern time on August 19, 2026.
Goods entered before that time may not be subject to the new Section 338 duties, but importers should confirm treatment with customs counsel, their broker, and any forthcoming guidance from U.S. Customs and Border Protection (CBP).
Why were the tariffs imposed?
The U.S. Administration cited Canadian measures that it says discriminate against or unreasonably burden U.S. commerce in three sectors.
1. Motor vehicles
The motor vehicle proclamation states that Canada has maintained, since April 9, 2025, a tariff system affecting U.S. motor vehicles. According to the proclamation, Canada applies a 25% tariff to U.S. motor vehicles that do not qualify for preferential duty-free treatment under USMCA. For U.S. motor vehicles that do qualify under USMCA, Canada applies a 25% tariff on the value of non-Canadian and non-Mexican content used in production, up to 85% of the vehicle's total value.
The proclamation also states that Canada maintains tariff-rate quotas for certain U.S. motor vehicles and that those quotas are granted in a manner intended to induce production investment in Canada. The Administration found that U.S. motor vehicle exports to Canada fell by approximately 22%, from about $25.9 billion to $20.3 billion, when comparing April 2025-March 2026 with the same period in 2024-2025.
2. Alcoholic beverages
The alcoholic beverages proclamation states that, beginning in March 2025, Canadian provinces and territories halted the purchase, distribution, or retailing of U.S. alcoholic beverages. The proclamation cites actions by Ontario's Liquor Control Board of Ontario and Quebec's Société des Alcools du Québec as examples, while noting that Alberta and Saskatchewan later lifted their bans in June 2025.
The Administration found that Canadian imports of U.S. alcoholic beverages decreased by approximately 81%, from about $718 million to $137 million, when comparing March 2025-February 2026 with the same period in 2024-2025.
3. Dairy
The dairy proclamation focuses on Canada's tariff-rate quota treatment for cheese. The Administration states that Canada gives retailers access to tariff-rate quota quantities for cheese under the Canada-EU Comprehensive Economic and Trade Agreement, but does not give retailers the same access under the USMCA cheese tariff-rate quota for U.S. products.
The proclamation concludes that this difference disadvantages U.S. dairy commerce compared with EU dairy commerce and supports the imposition of additional duties on certain Canadian products.
USMCA-origin goods may still be covered
A key point for importers is that the White House fact sheet states the new Section 338 tariffs apply to covered goods regardless of whether the goods originate under USMCA.
This means that USMCA eligibility alone may not exempt an article from the new 50% duty if the article is listed in the relevant Annex II and no exclusion applies. Importers should not assume that a valid USMCA certification eliminates exposure to these new tariffs.
Foreign trade zone treatment
The proclamations include special rules for goods admitted into a U.S. foreign trade zone (FTZ). Covered products admitted into an FTZ on or after the effective date must generally be admitted in "privileged foreign status" unless eligible for admission under domestic status under 19 C.F.R. Section 146.43. When those goods are later entered for consumption, they will be subject to the applicable ad valorem duty based on their HTSUS classification.
Companies using FTZs should review inventory timing, admission status, and downstream entry plans before August 19, 2026.
CBP implementation guidance expected
Each proclamation authorizes the Commissioner of U.S. Customs and Border Protection, in consultation with Treasury, Commerce, and the U.S. Trade Representative, to issue rules, guidance, instructions, or determinations necessary to implement and administer the new duties. The proclamations also authorize CBP, in consultation with other agencies, to make additional HTSUS modifications through notice in the Federal Register, including technical corrections to the annexes.
Importers should monitor CBP Cargo Systems Messaging Service notices, Federal Register updates, and HTSUS Chapter 99 guidance for filing instructions and applicable tariff subheadings.
Recommended actions for importers
Businesses importing goods from Canada should take the following steps now:
- Review product classifications: Confirm the HTSUS classification, country of origin, and whether the product appears in Annex II to any of the three proclamations.
- Assess exposure by entry date: Identify shipments expected to enter the United States on or after August 19, 2026.
- Do not rely solely on USMCA status: Covered goods may be subject to the new duties even if they qualify as USMCA-originating.
- Check for exclusions: Review whether the product is excluded because it is subject to Section 232 duties, covered by the WTO Civil Aircraft Agreement, or falls within a category identified by the White House as not subject to the new tariffs, such as energy, potash, fish, or critical minerals.
- Update landed cost models: The additional duty rate is 50% ad valorem, and the proclamations state that the duties generally apply in addition to other applicable duties and charges.
- Coordinate with customs brokers and trade counsel: Confirm filing requirements, Chapter 99 reporting, FTZ treatment, USMCA status and entry timing.
- Monitor CBP and Federal Register guidance: Implementation details, technical corrections, and HTSUS modifications may follow.
Bottom line
The July 20, 2026 proclamations create a significant new tariff risk for companies importing certain Canadian goods into the United States. The additional 50% duties take effect on August 19, 2026, and may apply even to goods that qualify under USMCA. Importers should immediately review affected product lists, entry timing, origin documentation, and customs filing procedures to determine exposure and prepare for implementation.
For more information on how ONESOURCE Global Trade solutions can assist you in managing supply chain risk, tariff challenges and regulatory compliance, please contact your Account Manager or Customer Success Manager.