Why It Matters

The Trump administration has imposed 50% tariffs on certain Canadian goods under Section 338 of the Tariff Act of 1930, the first time a president has expressly cited that statute to impose tariffs, according to a new Congressional Research Service (CRS) report. The tariffs took effect Aug. 22 after a brief suspension and failed negotiations; Canada responded with counter-tariffs on approximately US$20 billion worth of U.S. goods starting Sept. 8. ​

Congress now faces a choice of whether to codify, curb, or modify those restrictions, with several bills already introduced ranging from outright repeal of Section 338 to requirements for congressional approval before such tariff authorities are used.

The Big Picture

Section 338 directs the president to impose tariffs when a foreign country discriminates against U.S. commerce, up to a maximum rate of 50%. President Trump announced on July 20 that he would impose 50% tariffs on certain Canadian goods, citing Canadian discrimination against U.S. commerce in alcoholic beverages, dairy, and motor vehicles.

Canada's US$20 billion in counter-tariffs represented about 5% of U.S. imports from Canada and 6% to 8% of Canadian imports from the United States in 2025, according to CRS analysis of U.S. Census Bureau and Statistics Canada data. The product lists have been modified twice since the tariffs took effect, with Proclamation 11076, issued Oct. 23, taking effect Oct. 30.

After the Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize tariffs, the administration turned to other statutory authorities, including Section 338. The tariffs face a legal challenge, Gellert Global Group Corp. v. Trump, filed Oct. 20 in the U.S. Court of International Trade.

Four bills cited by the report remain at the introduced stage with no further action recorded:

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  • H.R.10175, sponsored by Rep. Bradley Scott Schneider (D-IL-10), would repeal Section 338 and nullify the proclamations imposing tariffs under it.
  • H.R.2464, also sponsored by Rep. Schneider, would repeal several unilateral tariff authorities.
  • S.348, the STABLE Trade Policy Act sponsored by Sen. Christopher A. Coons (D-DE), would require congressional approval before such authorities are used against U.S. allies.
  • H.Con.Res.25, sponsored by Rep. Jim Costa (D-CA), expresses the sense of Congress that prior tariffs on Canada violated the U.S.-Mexico-Canada Agreement.

The Bottom Line

Congress faces a choice on whether to codify, curb, or modify the Section 338 tariffs on Canadian imports. The U.S. International Trade Commission has requested public comment on how to fulfill its Section 338 statutory obligations. Canada's remission framework exempts a certain number of U.S.-Mexico-Canada Agreement-compliant vehicles from tariffs and is set to remain in place until April 8, 2027.

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