US bans some Canadian goods outright and stacks Section 338 tariffs on Section 232 duties

The details

On September 8, President Trump signed five proclamations under Section 338 of the Tariff Act of 1930. The measures landed the same day Canada began retaliatory tariffs on roughly $20 billion (C$27.6 billion) of U.S. goods, including steel, dairy, appliances, agricultural equipment, electronics and pulp and paper, according to Supply Chain Dive and CRS.

Import bans, effective September 29. Certain Canadian products are excluded from entry altogether: motorcycles, mopeds and cycles with internal-combustion engines over 800 cubic centimeters; beer, wines, cider, high-proof spirits and other fermented drinks; whey products, molasses and non-alcoholic beer. Until the bans take effect, these goods keep paying the 50% Section 338 tariff.

Tariff list changes, effective September 15. The expanded list adds specialty cheeses, modified fats and oils, bovine hides and upholstery leather, raw and dressed furskins, recreational motorboats, specialty paper, some steel and aluminum items, metal fittings and welding inputs, ATVs, golf carts, furniture and lamps. Rock salt, cement, toilet paper and bulk whisky and liqueurs in containers over 4 liters come off.

Stacking reverses the prior policy. The proclamations apply Section 338 duties “in addition to” Section 232 duties, reversing the July 20 measures, per Troutman’s analysis. For aluminum profiles, bars, rods, tubes and pipes newly added, that means 25% (Section 232) plus 50% (Section 338), a combined 75% additional duty. The White House fact sheet confirms the tariffs apply regardless of whether goods qualify under USMCA.

Federal procurement is also in play. Trump directed the U.S. Trade Representative and the GSA administrator to remove Canadian-origin products from GSA’s Multiple Award Schedules, which the fact sheet says manage over $50 billion in government purchasing.

Scale, in context. Hinrich Foundation trade expert Deborah Elms told Supply Chain Dive the banned products totaled less than $1 billion in trade value and called the tariff list swap “basically a wash” given the simultaneous removals. The round began after talks collapsed in August; the original 50% tariffs on $20 billion of Canadian goods took effect August 22 following a brief suspension, according to CRS.

What buyers should do

• Re-screen every Canadian vendor’s product classifications against both annexes: the September 15 tariff additions and the September 29 ban list.
• Recalculate landed cost for Canadian metals, where Section 232 and Section 338 now stack; treat USMCA origin as offering no tariff relief on covered goods.
• Check goods in transit or in bonded inventory against the two effective dates and confirm your broker is current on CBP’s Section 338 guidance.
• If you resell to federal agencies, review GSA-schedule offerings for Canadian-origin content ahead of the MAS purge.
• Update force majeure and duty pass-through clauses to distinguish a cost increase (75% stacked tariff) from lost supply (a ban), which forces re-sourcing.

The bigger picture

This is the second reason this year that USMCA stopped being a safe harbor for North American sourcing: the U.S. declined to renew the pact at its July 1 review (our analysis), and now Section 338 duties apply regardless of origin. The escalation followed the familiar 2025 pattern of measure-and-countermeasure, and it continued after this window: another scope change arrived with a proclamation for October 30 (coverage). For procurement, the durable lesson is that Canada sourcing now carries tariff and ban risk that contracts, not certificates of origin, have to absorb.