Trump Imposes
50% Tariff on Canadian Dairy-Related Imports under Section 338
·
President
Donald Trump
issued a proclamation under Section
338 of the Tariff Act of 1930 imposing an additional 50% tariff on
certain Canadian products over alleged discrimination against U.S. dairy exports.
·
The U.S.
alleges that Canada's dairy
tariff-rate quota (TRQ) system gives more favorable treatment to
European Union (EU)
dairy products than to U.S. dairy products.
·
According
to the proclamation, Canadian retailers
are allowed to access cheese import quotas under the Canada-EU CETA,
but are not eligible under
the USMCA quota system, disadvantaging U.S. cheese exports.
·
The U.S.
states that this policy restricts market access for U.S. cheese producers, resulting
in lost sales, reduced investment, and harm to American farmers and businesses.
·
The proclamation
declares Canada's dairy quota allocation system to be an unreasonable and discriminatory trade practice
under Section 338.
·
To offset
this disadvantage, the U.S. will impose an additional 50% ad valorem duty on specified
Canadian products.
·
The new
tariff will take effect from
12:01 a.m. (Eastern Time) on 19 August 2026.
·
The additional
duty will apply in addition
to existing import duties, except for products exempted under the
proclamation, including those already subject to Section 232 tariffs.
·
U.S. Customs
and Border Protection (CBP)
has been authorized to issue regulations and administer implementation of the new
tariff measures.
[ABS News Service/21.07.2026]
BY THE PRESIDENT
OF THE UNITED STATES OF AMERICA
A PROCLAMATION
1. Section 338 of
the Tariff Act of 1930 (19 U.S.C. 1338) (section 338) empowers the President to,
among other things, impose duties on imports of a foreign country to offset the
burden or disadvantage from a foreign country’s discrimination against or unequal
imposition on the commerce of the United States.
2. Canada, through
discrimination or an unreasonable and unequal imposition, treats the commerce of
certain foreign countries more favorably than commerce of the United States with
respect to dairy and in turn, places a burden and disadvantage on the commerce of
the United States. Specifically, Canada denies the commerce of the United States
benefits that Canada affords to materially similar dairy commerce from certain other
foreign countries and thus unreasonably burdens and disadvantages U.S. commerce
compared to the commerce of certain other foreign countries.
3. Canada maintains
a tariff-rate quota (TRQ) on cheeses of all types under the United States-Mexico-Canada
Agreement (USMCA) as well as a TRQ on cheese of all types under the Canada-European
Union (EU) Comprehensive Economic and Trade Agreement (CETA). The TRQs provide duty-free
access for the covered dairy products up to specified annual quantities (in‑quota
quantities) and apply a customs duty to imports that exceed the respective in-quota
quantities.
4. To access the
TRQs under the USMCA and the CETA, Canada’s dairy TRQ allocation measures establish
eligibility criteria. But Canada does not have the same eligibility criteria for
the USMCA and the CETA, disfavoring the commerce of the United States. While Canada’s
eligibility criteria for the USMCA dairy TRQs — and specifically, the cheeses of
all types TRQ — do not allow retailers to obtain and use TRQ quantities, the eligibility
criteria for the CETA do grant retailers access to the TRQ quantity for cheese of
all types.
5. By making retailers
ineligible to use the USMCA TRQ for cheeses of all types, Canada discriminates against
U.S. goods that are similar to EU goods that are entered pursuant to the CETA cheese
of all types TRQ. Canada thus denies to the United States the favorable treatment
that Canada provides to the EU and its member States. This discrimination impedes
market access into Canada and results in lost sales or revenues for U.S. dairy producers
and exporters, among other things. The United States, U.S. businesses and workers,
and U.S. commerce are negatively affected by Canada’s discriminatory practices.
6. 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 cheese of all types under the CETA. I also find as a fact
that this discrimination places the commerce of the United States at a disadvantage
compared to the commerce of the EU and its member States. And I find as fact that
Canada’s imposition is unreasonable, is not equally enforced upon the like articles
of every foreign country, and places a burden on the commerce of the United States.
7. Further, I find
that imposing additional ad valorem duties on certain products of Canada
to address the burden or disadvantage from this discrimination or unequal and unreasonable
imposition is in the public interest, will serve the public interest, and is consistent
with the interests of the United States. When U.S. producers are unfairly denied
export opportunities by Canada’s TRQ allocation measures, they lose sales or revenues
that support production in the United States, among other things. This suppresses
U.S. agricultural output as well as investment and thereby undermines employment
and economic vitality in American communities. Imposing additional duties on certain
products of Canada will, among other things, expand opportunities for U.S. producers
to compete within the U.S. market, enhancing American production and bringing attendant
economic and societal benefits, and may spur Canada to remove the discrimination
against U.S. cheeses of all types.
8. Accordingly, I
find that it is necessary and appropriate and in the public interest to impose an
additional ad valorem duty of 50 percent on certain products of Canada, as
identified in Annex II to this proclamation, effective as of 12:01 a.m. eastern
time on August 19, 2026. I determine that the additional ad valorem duties
imposed in this proclamation, as described below, will offset the burden or disadvantage
on U.S. commerce from Canada’s discrimination or unreasonable and unequal imposition.
In my judgment, the action in this proclamation is consistent with the public interest,
will serve the public interest, and is consistent with the interests of the United
States.
9. Section 338 authorizes
the President, if he determines it will serve the public interest, to offset any
burden or disadvantage placed on the commerce of the United States by an unequal
imposition or discrimination by a foreign country by specifying and declaring additional
duties not to exceed 50 percent ad valorem (or its equivalent) and not to
take effect earlier than 30 days after the President’s proclamation finding that
a foreign country imposes an unreasonable charge, exaction, regulation, or limitation
that is not equally enforced on the like articles of every foreign country, or discriminates
in fact against U.S. commerce in a way that places the commerce of the United States
at a disadvantage compared to the commerce of any foreign country. Section 338 also
authorizes the President to suspend, revoke, supplement, or amend any proclamation
under section 338 whenever the President deems that the public interests require
such action. Further, section 338 authorizes the President to exclude products of
the foreign country if the foreign country maintains or increases the discrimination
against the commerce of the United States and the President deems the exclusion
to be consistent with the public interests and the interests of the United States.
10. Section 604 of
the Trade Act of 1974, as amended (19 U.S.C. 2483) (section 604), authorizes the
President to embody in the Harmonized Tariff Schedule of the United States (HTSUS)
the substance of statutes affecting import treatment, and actions thereunder, including
the removal, modification, continuance, or imposition of any rate of duty or other
import restriction.
NOW, THEREFORE, I,
DONALD J. TRUMP, President of the United States of America, by the authority vested
in me by the Constitution and the laws of the United States, including section 338;
section 301 of title 3, United States Code; and section 604, do hereby proclaim
as follows:
(1) Except as otherwise
provided in this proclamation, certain products of Canada, as set forth in Annex
II to this proclamation, imported into the United States shall be subject to an
additional ad valorem duty of 50 percent, effective for goods entered for
consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m.
eastern time on August 19, 2026.
(2) Except as otherwise
provided in this proclamation and in Annex I to this proclamation, the duties imposed
in this proclamation are in addition to any other duties, taxes, fees, exactions,
and charges applicable to such products. The duties imposed in this proclamation
shall not apply to articles subject to duties pursuant to section 232 of the Trade
Expansion Act of 1962, as amended (19 U.S.C. 1862), or articles, excluding unmanned
aircraft, subject to the World Trade Organization Agreement on Trade in Civil Aircraft.
(3) The HTSUS is
modified as provided in Annex II to this proclamation, effective with respect to
goods entered for consumption, or withdrawn from warehouse for consumption, on or
after 12:01 a.m. eastern time on August 19, 2026, and the modifications shall continue
in effect, unless this action is expressly reduced, modified, or terminated.
(4) Any product subject
to the duties imposed in this proclamation, except those eligible for admission
under “domestic status” as described in 19 CFR 146.43, that is subject to the duties
imposed in this proclamation and that is admitted into a United States foreign trade
zone on or after the effective date of this proclamation must be admitted as “privileged
foreign status” as described in 19 CFR 146.41, and will be subject upon entry for
consumption to any ad valorem rate of duty related to the classification
under the applicable HTSUS subheading.
(5) The head of each
executive department and agency (agency) is authorized to and shall take all appropriate
measures within the agency’s authority to implement this proclamation. The head
of each agency may, consistent with applicable law, including section 301 of title
3, United States Code, redelegate the authority to take such appropriate measures
within the agency.
(6) The Commissioner
of U.S. Customs and Border Protection (CBP), in consultation with the Secretary
of the Treasury, the Secretary of Commerce, and the United States Trade Representative,
is authorized to issue such rules, regulations, guidance, instructions, or determinations
as may be necessary to implement this proclamation and is authorized to take any
necessary measures to administer the duties imposed in this proclamation.
(7) The Commissioner
of CBP, in consultation with the Secretary of the Treasury, the Secretary of Commerce,
the United States Trade Representative, the Chairman of the United States International
Trade Commission, and any other senior official he deems appropriate, shall determine
whether any additional modifications to the HTSUS are necessary to effectuate this
proclamation and shall make such modifications to the HTSUS through notice in the
Federal Register, including any technical correction to the annexes to this
proclamation.
(8) For any rule
or regulation the Commissioner of CBP makes to implement this proclamation, the
Commissioner of CBP shall, to the extent required by law, obtain the approval of
the President or the United States Trade Representative. The United States Trade
Representative is delegated the President’s approval authority in 19 U.S.C. 1338(h).
(9) Any provision
of previous proclamations and Executive Orders that is inconsistent with this proclamation
is superseded to the extent of such inconsistency. If any provision of this proclamation
or the application of any provision to any individual or circumstance is held to
be invalid, the remainder of this proclamation and the application of its provisions
to any other individuals or circumstances shall not be affected.
IN WITNESS WHEREOF,
I have hereunto set my hand this twentieth day of July, in the year of our Lord
two thousand twenty-six, and of the Independence of the United States of America
the two hundred and fifty-first.
DONALD J. TRUMP