Trump amends 50% tariffs on Canadian products, removes industrial and agricultural goods from scope
Key Facts
U.S. President Donald Trump signed an amendment under Section 338 removing specific Canadian products from the scope of the tariffs and replacing them with other goods, with the changes set to take effect on October 30, 2026. Products removed include plywood panels, some paper products, machinery, refrigeration equipment and packing crates. The White House said replacements include some valves, carpets, waste and other products, without listing all additions. The administration says the measure is intended to balance the burden on U.S. trade. The amendment comes amid a trade dispute between the two countries, after Canada imposed retaliatory tariffs on about $20 billion worth of U.S. exports, according to the White House.
The fact sheet says Section 338 tariffs apply to all covered goods, whether or not they qualify as originating under the United States-Mexico-Canada Agreement. The tariffs are also added to those imposed under Section 232. That means a product's eligibility under the agreement does not, in the White House's wording, exclude it from the scope of Section 338 tariffs. The statement did not identify all products to be added to the list, mentioning only some valves, carpets, waste and other products. The additions and removals take effect on the same date, October 30, 2026.
The tariff amendment followed an appeal to the administration for exemptions by Republican Sen. Susan Collins, the Associated Press reported. Collins said U.S. farmers and producers rely on specialized equipment, packing materials and Canadian products that are unavailable from U.S. suppliers or difficult to replace without significant costs. She singled out wild blueberry producers in Maine, who need specialized Canadian harvesting crates compatible with their processing equipment. The agency quoted the White House as saying the aim was to "balance the burden on U.S. trade while better serving the public interest." Removing some inputs from the scope of the tariffs gives these producers room to continue using supplies they described as unavailable domestically or costly to replace.
The amendment follows an earlier escalation in the dispute, when Trump imposed a ban in September on $1 billion worth of Canadian imports, including alcoholic beverages, dairy products and motorcycles, according to the Associated Press. The current step changes the list of products subject to tariffs, removing some goods and adding others, rather than ending the tariffs more broadly. The White House said Canada imposed new retaliatory tariffs on about $20 billion worth of U.S. exports during the summer before the October announcement. The administration described the reshuffling of goods as a way to balance the burden on U.S. trade. Collins said she would seek further exemptions and encourage a broader trade agreement with Canada.
The trade development comes as the Bank of Canada faces a new monetary policy meeting on October 28. Ahead of the meeting, money markets expected the interest rate to remain at 2.25%, while pricing in a possible 25-basis-point increase in December, according to a Reuters report. In Canadian inflation data, energy prices rose 19% year over year in September, after a 15.4% increase in August. But annual inflation excluding the effect of higher gasoline prices fell to 2.2% in September from 2.4% in August. After the inflation data were released, the Canadian dollar rose 0.29% to 1.4096 Canadian dollars per U.S. dollar, according to the report published on October 19.