White House Section 338 proclamation adds 50% duty on some Canadian auto imports (Aug. 19)

On July 20, 2026, President Trump issued a Section 338 proclamation imposing an additional 50% ad valorem duty on certain Canadian motor-vehicle products as identified in Annex II. The duty takes effect at 12:01 a.m. Eastern time on Aug. 19, 2026.

Administration officials say the move responds to what they describe as Canada’s discriminatory or unequal treatment of U.S. motor-vehicle exports. The practical question for importers, dealers, and supply-chain managers is how U.S. Customs and Border Protection (CBP) will apply the new duty at import entry once the effective time arrives.

Quick take: what changed

• New duty: an additional 50% ad valorem duty
• Who it targets: certain Canadian motor-vehicle products listed in Annex II
• When it starts: Aug. 19, 2026 at 12:01 a.m. ET

What “Section 338” is doing here (plain-English)

Section 338 gives the President authority to impose additional duties when a country’s alleged discrimination or unequal imposition is said to put U.S. commerce at a disadvantage—an approach the White House and USTR are framing as “offsetting” that burden.

What to expect for covered shipments

The proclamation limits coverage to the products identified in Annex II, so the duty is not described as a blanket tax on every Canadian car or truck. The White House also says these Section 338 tariffs won’t apply to certain categories such as energy, potash, Section 232 items, and certain other goods.

Operationally, the next step is expected to be how CBP applies the duty when entries are filed—plus how importers handle any classification and compliance questions that arise as the Aug. 19 deadline approaches.

What to watch next (from now to Aug. 19)

• CBP application at entry: how the additional duty is assessed for Annex II-covered products.
• Classification/compliance: whether importers seek clarification for goods that may be close to the line of coverage.
• Shipment timing and inventory planning: how companies adjust delivery schedules ahead of the 12:01 a.m. ET effective cutoff.

If you import Canadian vehicles or parts covered by Annex II, Aug. 19 is the key date to watch for potential changes in landed costs. The exact impact on vehicle or parts pricing will depend on contracts and how quickly supply-chain plans shift.

Sources

• White House proclamation (Section 338 additional duties on Canadian motor vehicles) — July 20, 2026
• USTR statement on Section 338 tariffs on Canada (Ambassador Greer statement) — July 2026