Why It Matters
President Donald Trump modified the list of Canadian goods subject to a 50% tariff, removing some products and adding others in a move that affects U.S. importers, businesses, and consumers.
Proclamation 11076, signed Oct. 23, modifies the scope of existing 50% ad valorem duties on Canadian goods, effective for products entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern time Oct. 30. The administration says the tariffs are intended to counter what it considers Canadian discrimination against U.S. commerce and protect American economic interests.
What The Proclamation Does
The proclamation removes certain Canadian products listed in Part A of Annex I from the additional 50% duty and subjects products listed in Part B to that duty. The changes alter the products covered by the existing tariff rather than establishing a new tariff rate. The duties imposed under Proclamation 11048, as subsequently modified, apply in addition to any applicable duties imposed under Section 232 of the Trade Expansion Act of 1962.
Products Added And Removed
According to Sandler, Travis & Rosenberg, the proclamation removed 22 products and added 100, including certain cocoa powder, paints, soaps, vinyl flooring, carpets, canoes, chest freezers and valves. Covered products remain subject to the 50% Section 338 tariff regardless of whether they qualify as originating goods under the United States-Mexico-Canada Agreement, in addition to applicable Section 232 tariffs.
Sen. Susan Collins (R-ME) said she had secured exemptions for products important to Maine agriculture, including specialized equipment and packaging that farmers and growers could not readily obtain from U.S. suppliers or replace without significant expense.
What It Undoes
Proclamation 11048, issued July 20, imposed the original 50% ad valorem duties after determining that Canada's motor vehicle tariff scheme discriminated against U.S. commerce. Proclamation 11065, issued Sept. 8, previously modified the product scope. Proclamation 11076 makes additional changes to that list. The new proclamation supersedes provisions of earlier proclamations and executive orders only to the extent they conflict with its terms.
What Congress Has Done
The proclamation invokes Section 338 of the Tariff Act of 1930, which authorizes the president to impose additional duties of up to 50% ad valorem in response to discrimination against U.S. commerce. The statute also permits the president to suspend, revoke, supplement or amend such proclamations when the public interest requires.
A Congressional Research Service report updated Nov. 2 discusses congressional options for responding to trade restrictions on Canadian imports, including legislation to codify, limit or modify the measures.
S.Res. 898, introduced Sept. 24 by Sen. Jacky Rosen (D-NV) and referred to the Senate Finance Committee, expresses the Senate's view that the Section 338 tariffs harm U.S. consumers and businesses and should be rescinded. The resolution remains at the introduced stage.
The Fight Over The Tariffs
Trade lawyer Barry Appleton told BNN Bloomberg and CTV News that the revision shifted products between tariff categories without reducing the overall trade barrier.
The Liberty Justice Center filed a lawsuit in the U.S. Court of International Trade challenging the underlying Section 338 tariffs on behalf of a U.S. business and a proposed class of importers. The lawsuit argues that the tariffs exceed the authority granted by Section 338 and seeks to block their collection and obtain refunds.
Sandler, Travis & Rosenberg reported that products covered by the tariffs account for approximately 5% of Canadian exports to the United States, valued at roughly $20 billion. The office of Canadian Trade Minister Dominic LeBlanc said it would assess the measures and remained prepared to work toward a mutually beneficial trade relationship.
What Agencies Must Do Next
The commissioner of U.S. Customs and Border Protection, in consultation with the secretary of the Treasury, secretary of Commerce and U.S. trade representative, is authorized to issue rules, regulations, guidance or determinations necessary to implement the proclamation.
The CBP commissioner must also determine whether additional modifications to the Harmonized Tariff Schedule of the United States are necessary and, if so, publish those changes in the Federal Register.
The proclamation establishes no additional implementation deadlines beyond the Oct. 30 effective date. Its modifications remain in effect unless subsequently suspended, revoked, supplemented, amended, or terminated.
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