What Trump's Section 338 Canada Orders Actually Say

What Trump's Section 338 Canada Orders Actually Say

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Three proclamations, not one action

President Trump's 50% tariffs on certain Canadian goods did not come from a single order. Three separate proclamations were signed July 20, 2026, and published in the Federal Register on July 23.

Proclamation 11046 covers alcoholic beverages. Proclamation 11047 covers dairy, published at 91 FR 46653 as document 2026-14992. Proclamation 11048 covers motor vehicles, published at 91 FR 46663 as document 2026-14997.

Each rests on its own factual finding, and each carries its own annex of covered goods. U.S. Customs and Border Protection folded all three into a single set of tariff headings — 9903.03.12 through 9903.03.16 in the Harmonized Tariff Schedule — in guidance issued the night of August 21.

The administration's theory, in its own words

Section 338 of the Tariff Act of 1930, codified at 19 U.S.C. 1338, lets the president act when he "finds as a fact" that a country discriminates against U.S. commerce. Each proclamation makes that finding explicitly.

On dairy, Proclamation 11047 states: "Accordingly, pursuant to section 338, I find as a fact that Canada is discriminating in fact against the commerce of the United States through Canada's TRQ allocation measures imposed on U.S. cheeses of all types under the USMCA, as compared to Canada's TRQ allocation measures imposed on EU cheeses."

Timeline

July 20

The timeline, corrected

The proclamations were signed July 20 and set the duties to take effect August 19, 2026.

August 18

On August 18, the president signed a further proclamation — Proclamation 11056, "Canada; Temporary Suspension of Additional Duties" — pushing the effective date back three days. Its stated reason: senior executive branch officials reported that "Canada has expressed a commitment to remove the discriminations" at issue, and in their opinion "the public interests favor suspending for a period of 3 days" the duties while talks continued.

late on Friday, August 21

The talks collapsed late on Friday, August 21. The duties took effect at 12:01 a.m. Eastern on Saturday, August 22, exactly as the suspension proclamation had rescheduled them.

More

The specific grievance is narrow and technical. Canada runs one tariff-rate quota for cheese under the USMCA and another under its trade agreement with the European Union. The proclamation says Canada's eligibility rules for the USMCA cheese quota "do not allow retailers to obtain and use TRQ quantities," while the rules for the EU quota "do grant retailers access to the TRQ quantity for cheese of all types." That gap, the document argues, denies U.S. exporters treatment Canada gives Europeans.

On alcohol, the finding is that Canada banned the purchase, distribution or retailing of U.S. alcoholic beverages "while not banning or similarly restricting such products from other countries," in the White House's later summary of Proclamation 11046.

On vehicles, Proclamation 11048 points to Canada's United States Surtax Order (Motor Vehicles 2025), SOR/2025-118 — a 25% tariff Canada has maintained since April 9, 2025, on U.S. motor vehicles that do not qualify for USMCA duty-free treatment, plus automaker-specific quotas the proclamation says Canada reduced for companies that shifted manufacturing out of Canada.

What the statute still allows

The tariffs now in force are the first rung of Section 338, not the last.

Subsection (a) is the authority the president used: additional duties on the goods of a country found to be discriminating. Subsection (d) caps those duties at 50% ad valorem — the administration went to the ceiling — and requires 30 days between the proclamation and collection.

Subsection (b) goes further. If the president finds that a country "has, after the issuance of a proclamation as authorized in subdivision (a)," maintained or increased its discrimination, he is authorized to issue a further proclamation directing that those products "shall be excluded from importation into the United States." Not taxed. Barred.

Subsection (f) backs that up: articles imported contrary to the section "shall be forfeited to the United States" and are liable to seizure.

Subsection (c) is the provision the August 18 suspension ran on. It lets the president "suspend, revoke, supplement, or amend any such proclamation" whenever he deems the public interest requires it — and lets a proclamation cover a whole country or just part of one.

Subsection (g) assigns a standing job to the U.S. International Trade Commission: it "shall be the duty of the commission to ascertain and at all times to be informed" whether any country is practicing the discriminations the section describes, and when it finds them, to bring the matter to the president "together with recommendations." That duty does not require a request from the White House.

How much trade is covered

The Associated Press reported that the tariffs are expected to affect about $20 billion in Canadian goods, roughly 5% of what Canada sells to the United States annually.

The duties apply on top of existing antidumping, countervailing and other charges, according to CBP, and they apply whether or not a good would otherwise qualify for USMCA preferential treatment. CBP set the additional rate at 0% for two categories it carved out — certain steel, aluminum, copper, vehicle, wood, semiconductor and patented pharmaceutical articles, and civil aircraft and their parts.

The documents

The statute is at 19 U.S.C. 1338. The three July 20 proclamations are at 91 FR 46639 (alcoholic beverages), 91 FR 46653 (dairy) and 91 FR 46663 (motor vehicles). The August 18 suspension is posted on whitehouse.gov. CBP's implementing guidance is Cargo Systems Messaging Service message 69606660, issued August 21.

The Frank's earlier report on the legal questions surrounding this untested 1930 authority remains available at trumps-canada-tariffs-rest-on-untested-1930-law.

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