BY THE PRESIDENT OF THE UNITED STATES OF AMERICA
A PROCLAMATION
Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338) empowers the President to impose duties on imports from a foreign country to counteract the burden or disadvantage caused by that country’s discriminatory or unequal practices affecting U.S. commerce.
Canada has implemented discriminatory and unreasonable tariffs on U.S. auto and auto parts exports, disadvantaging U.S. commerce while favoring other countries. Specifically, Canada has imposed a tariff system exclusively on U.S. motor vehicles, favoring commerce from other countries as outlined in Canada’s United States Surtax Order (Motor Vehicles 2025), SOR/2025-118. This system denies U.S. commerce the benefits given to similar commerce from other countries, creating an unequal burden on U.S. goods.
Since April 9, 2025, Canada has enforced a 25 percent tariff on U.S. motor vehicles that do not qualify for duty-free treatment under the United States-Mexico-Canada Agreement (USMCA). For those that do qualify, Canada still imposes a 25 percent tariff on non-originating goods used in production, up to 85 percent of the vehicle’s total value. Additionally, Canada applies a tariff-rate quota (TRQ) on U.S. vehicles that qualify for duty-free treatment, limiting duty-free access and applying tariffs on quantities exceeding the quota. These measures are intended to encourage production investment in Canada, and Canada has reduced the TRQs for U.S. companies relocating manufacturing from Canada to the United States. The specific in-quota quantities per company are not disclosed, though the new tariff rates are listed in Customs Notice 25-15: United States Surtax Order (Motor Vehicles 2025).
The U.S., its businesses, workers, and commerce are adversely affected by Canada’s discriminatory tariff policy. Following the implementation of this scheme, U.S. vehicle exports to Canada dropped significantly. Comparing April 2025 through March 2026 to the same period in 2024-2025, U.S. motor vehicle exports to Canada fell by approximately 22 percent, from $25.9 billion to $20.3 billion.
The tariff scheme targets only U.S.-origin motor vehicles, excluding those from other countries. Consequently, exports from countries such as Mexico, Japan, Korea, and Germany to Canada have increased, filling the gap left by reduced U.S. exports. Specifically, from April 2025 to February 2026, Canadian imports of Mexican vehicles rose by approximately 23.6 percent, while imports from Japan, Korea, and Germany increased by 10.1 to 13.5 percent. Overall, imports from countries other than the U.S. grew by about $2.85 billion, with Mexico contributing nearly $2 billion to this increase.
Pursuant to section 338, it is determined that Canada discriminates against U.S. commerce through its motor vehicle tariff scheme, placing U.S. commerce at a disadvantage compared to other countries. Canada’s imposition is deemed unreasonable and not uniformly enforced on similar products from other countries, thereby burdening U.S. commerce.
To address the burden and disadvantage caused by this discrimination, additional ad valorem duties on specific Canadian products are deemed necessary and in the public interest. This action aims to counteract the effects of Canada’s tariffs and TRQs, which deprive U.S. producers of export opportunities and revenue, ultimately suppressing U.S. industrial output, investment, and employment. Imposing these additional duties could expand opportunities for U.S. producers in the domestic market, enhance American production, and potentially prompt Canada to eliminate discrimination against U.S. vehicles.
Therefore, it is determined that imposing an additional ad valorem duty of 50 percent on certain Canadian products, effective from 12:01 a.m. eastern time on August 19, 2026, is necessary and appropriate. This measure is expected to offset the burden on U.S. commerce resulting from Canada’s unfair practices. The action aligns with the public interest and the interests of the United States.
Section 338 authorizes the President to impose additional duties not exceeding 50 percent ad valorem if it serves the public interest to counteract a foreign country’s unequal imposition or discrimination. The duties must take effect no earlier than 30 days after the President’s proclamation. The President may also suspend, revoke, or amend such proclamations as needed in the public interest and exclude articles from the foreign country if discrimination persists.
Section 604 of the Trade Act of 1974 authorizes the President to incorporate the substance of statutes affecting import treatment into the Harmonized Tariff Schedule of the United States (HTSUS), including the imposition or modification of duties.
NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by the authority vested in me by the Constitution and U.S. laws, including section 338, section 301 of title 3, United States Code, and section 604, hereby proclaim as follows:
(1) Except as specified in this proclamation, certain Canadian products listed in Annex II will be subject to an additional 50 percent ad valorem duty, effective for goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern time on August 19, 2026.
(2) Except as provided in this proclamation and Annex I, these duties are in addition to existing duties, taxes, fees, and charges. They do not apply to articles subject to duties under section 232 of the Trade Expansion Act of 1962 or to articles covered by the World Trade Organization Agreement on Trade in Civil Aircraft, excluding unmanned aircraft.
(3) The HTSUS will be modified as outlined in Annex II, effective for goods entered for consumption or withdrawn from warehouse for consumption on or after August 19, 2026, with modifications continuing unless expressly changed.
(4) Products subject to these duties, except those eligible for “domestic status” under 19 CFR 146.43, must be admitted into U.S. foreign trade zones under “privileged foreign status” and will be subject to applicable ad valorem duty rates upon entry for consumption.
(5) Each executive department and agency is authorized and required to take appropriate measures within their authority to implement this proclamation. Authority may be redelegated as permitted by law.
(6) The Commissioner of U.S. Customs and Border Protection (CBP), in consultation with relevant officials, is authorized to issue necessary rules, regulations, and guidance to implement this proclamation and administer the imposed duties.
(7) The Commissioner of CBP, after consulting relevant officials, will determine if additional HTSUS modifications are needed to implement this proclamation and will make such modifications through the Federal Register, including technical corrections to the annexes.
(8) For any CBP rule or regulation related to this proclamation, the Commissioner of CBP must obtain approval from the President or the United States Trade Representative, who is delegated the President’s approval authority under 19 U.S.C. 1338(h).
(9) Any provision of previous proclamations and Executive Orders inconsistent with this proclamation is superseded. If any part of this proclamation is deemed invalid, the remainder remains unaffected.
IN WITNESS WHEREOF, I have hereunto set my hand this twentieth day of July, in the year of our Lord two thousand twenty-six, and of the Independence of the United States of America the two hundred and fifty-first.
ANNEX I
ANNEX II
DONALD J. TRUMP
