Two distinct United States tariff actions landed in the week of July 20, 2026, and they work on entirely different legal footings, cover different goods, and carry different dates. On July 20, three presidential proclamations imposed an additional 50% ad valorem duty on certain Canadian motor vehicles, dairy products and alcoholic beverages, effective August 19, 2026. On July 24, a separate Section 301 action imposed forced-labour tariffs of 10% or 12.5% on goods from 60 economies, with Canada at the 10% rate — and that one is already in force. Exporters need to check both, because the compliance response is not the same.
The 50% action — Section 338, three sectors, effective August 19
The three proclamations were signed on July 20, 2026 and published in the Federal Register on July 23, 2026. Each is titled Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States, and they cover, respectively:
- Motor vehicles
- Dairy
- Alcoholic beverages
The authority invoked is section 338 of the Tariff Act of 1930 — a rarely used provision empowering the President to impose duties to offset discrimination against U.S. commerce. This is a different statutory basis from the Section 232 national-security tariffs on steel and aluminum, and different again from Section 301. That distinction matters, because exclusion processes, review mechanisms and any eventual legal challenge all follow the statute.
Each proclamation states the rationale in trade-flow terms. The motor vehicle proclamation cites Canada’s 25% tariff rate on U.S. motor vehicles maintained since April 9, 2025, and Canada’s application of a 25% rate to the value of non-Canadian, non-Mexican content in USMCA-qualifying vehicles, up to 85% of vehicle value. The alcoholic beverages proclamation cites an approximately 81% decline in Canadian imports of U.S. alcoholic beverages (from roughly $718 million to roughly $137 million) comparing March 2025–February 2026 against the prior year, alongside increases from other suppliers.
Practical impact: the duty is 50% ad valorem, additional to duties otherwise applicable, and applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on August 19, 2026. Scope is defined by the HTSUS subheadings listed in Annex II of each proclamation, not by sector labels — so “dairy” and “alcoholic beverages” are shorthand, and the operative question for any given shipment is whether its classification appears in the relevant annex. Exporters in these three sectors should pull the annexes now, match them against the classifications actually used on their U.S. entries, and use the lead time before August 19 to confirm scope and review who bears the duty under their contracts.
A fourth proclamation signed the same day, Further Strengthening Actions Taken To Adjust Imports of Aluminum Into the United States, is a separate Section 232 aluminum measure and is not part of the Section 338 package.
Read the motor vehicles proclamation | dairy | alcoholic beverages
The Section 301 forced-labour tariffs — already in force since July 24
Separately, the U.S. Trade Representative initiated 60 investigations on March 12, 2026 into economies alleged to have failed to impose and effectively enforce a prohibition on importing goods produced with forced labour. The resulting action imposes tariffs on all products of each investigated economy, subject to exemptions set out in the notice’s annexes.
Two rates apply. An economy that imposes a forced-labour import prohibition, has committed to impose and enforce one through an Agreement on Reciprocal Trade, or has a partial regime in place, receives the 10% rate; every other investigated economy receives 12.5%. For certain economies the rate is applied net of the product’s most-favoured-nation duty, so that the combined MFN and Section 301 duty reaches the target rate rather than stacking on top of it. Canada is among the six economies — with Ecuador, the European Union, Indonesia, Mexico and Pakistan — found to have failed to effectively enforce a prohibition it does impose, and falls at the 10% rate.
Practical impact: the duties apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on July 24, 2026. There is a narrow in-transit exception worth checking against your shipping records: goods that were loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern time on July 24, 2026, and entered or withdrawn for consumption before 12:01 a.m. eastern time on July 28, 2026, are not subject to the additional duty. That window has now closed, so any claim under it needs documentary proof of loading and transit timing.
The action also establishes tariff-rate quotas, where feasible, for Bangladesh, Cambodia, Indonesia and Malaysia, tied to those economies’ importation of U.S. cotton and textile inputs.
Read the USTR notice of action
Canada’s response
On July 20, 2026, Prime Minister Mark Carney issued a statement describing the announced 50% tariff as “the latest in a series of unilateral U.S. trade actions that began with the U.S. imposing a series of tariffs in direct violation of the Canada-United States-Mexico Agreement (CUSMA),” including tariffs on the Canadian auto sector, and stated that Canada “has merely matched those measures.” The statement noted that Canada has made detailed proposals to resolve the dispute and modernise CUSMA, and stands ready to intensify discussions.
On July 21, 2026, the Advisory Committee on Canada–U.S. Economic Relations met in Ottawa to discuss the measures, with the Honourable Dominic LeBlanc, Chief Trade Negotiator Janice Charette and Ambassador Mark Wiseman participating.
Read the Prime Minister’s statement | Read the Department of Finance page on Canada’s response to U.S. tariffs
What this means for your exports
Two actions, four days apart, on two different statutes, with different country scopes and different effective dates — and in both cases the answer for any particular shipment sits in an annex of HTSUS subheadings rather than in the sector name. NGB can help you determine whether your goods appear in the Section 338 annexes ahead of August 19, confirm how the Section 301 rate is being applied to your entries since July 24, and assess whether any in-transit relief was available on shipments already moving.
