New Section 338 measures ban covered alcohol, dairy products and large motorcycles beginning September 29; tariff-list changes take effect September 15
The White House escalated its trade dispute with Canada on September 9 by announcing import bans on specified Canadian alcohol, dairy products and large motorcycles, while revising the Canadian goods subject to 50% ad valorem duties under Section 338 of the Tariff Act of 1930.
The measures convert selected products from a 50% duty to an outright import prohibition and modify the remaining tariff coverage.
The bans take effect September 29, while additions to and removals from the 50% tariff lists take effect September 15. For importers, the distinction is material: a prohibited product cannot enter the United States upon payment of additional duties.
President Trump signed five proclamations on September 8 after Canada’s counter-tariffs on C$27.6 billion—about US$20 billion—of U.S. goods took effect that day. Canada imposed duties of 15%, 25% and 50% in response to U.S. Section 338 tariffs that took effect August 22.
According to the White House fact sheet, the new U.S. measures cover three categories:
Alcohol: The United States will prohibit imports of covered Canadian beer, wine, whisky, vodka, gin, rum, cider and other packaged alcoholic beverages.
Dairy and related products: The prohibition covers whey and modified-whey products, several forms of molasses and nonalcoholic beer.
Motorcycles: The prohibition covers Canadian motorcycles, mopeds and motorized cycles with reciprocating internal-combustion engines exceeding 800 cubic centimeters.
The product scope is governed by the Harmonized Tariff Schedule provisions in the proclamations’ annexes, not by their general descriptions. The White House published separate annexes for alcohol, dairy and related products, and motorcycles.
The bans apply to covered goods imported on or after 12:01 a.m. Eastern time on September 29. Goods imported before that date but not entered for consumption or withdrawn from warehouse remain subject to the applicable 50% duty.
Each proclamation also provides that the 50% duty will revive if a court invalidates the corresponding import ban.
The administration separately revised the scope of the 50% Section 338 duties.
Effective September 15, certain products—including rock salt and cement—will leave the tariff lists, while other goods, including all-terrain vehicles and additional dairy products, will be added.
The duties apply to covered products regardless of whether they qualify for preferential treatment under the United States-Mexico-Canada Agreement. They also apply in addition to relevant Section 232 duties.
U.S. Trade Representative Jamieson Greer described the combination of import bans and tariff adjustments as a response to Canada’s continued retaliation and alleged discrimination involving alcohol, dairy and motor vehicles.
The administration invoked Section 338’s authority to exclude foreign products when a country maintains or increases discrimination against U.S. commerce. USTR’s statement characterizes the action as a “calibration” of the earlier tariffs.
The White House also said Trump directed USTR and the General Services Administration to remove Canadian-origin products from GSA Multiple Award Schedules, which support more than $50 billion in federal procurement. That step would extend the dispute beyond border measures by restricting Canadian suppliers’ access to long-term U.S. government contracts. The administration has not yet published detailed implementing instructions for the procurement restriction.
Canada had not announced new countermeasures as of September 10 Prime Minister Mark Carney described Washington’s new import bans and tariff-list changes as “relatively modest” and indicated that Canada may not answer them with additional measures.
Carney said Canada would pursue a more independent economy and reduce its vulnerability to pressure from any single country. His government maintained that it would negotiate when Washington was prepared to pursue a mutually beneficial agreement respecting Canadian sovereignty.
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