The U.S.-Canada trade conflict has escalated significantly over the past several months, marked by the rollout of retaliatory tariffs and warnings of slowing economic growth. President Donald Trump signed a proclamation on October 23, 2026, modifying the 50% U.S. tariffs on Canadian imports under Section 338 of the Tariff Act of 1930, which takes effect on October 30, 2026. This proclamation further refines the scope of the tariffs on certain Canadian products previously announced on July 20, 2026, and modified on September 8, 2026.
The proclamation removes the following products from the additional 50% tariff:
The proclamation adds the following products to the 50% tariff list:
Changes to the Canadian tariff list essentially ease costs for some industries but raise them for others. The proclamation added more than 100 Canadian products to the 50% tariff list that are primarily items consumers buy or those used in construction activities. Construction and renovation industries bear most of the brunt of these new tariffs because flooring, valves and other appliances and tools go into residential buildings and commercial interiors. However, experts do not expect the impact of these changes to be too significant.
For some Canadian imports, 22 products in total, these new changes will bring the much-needed relief from the additional 50% tariff. The revised list removes certain plywood sheets and paper products, along with specified machinery, refrigeration equipment, packing crates and boxes. Most of these products are things businesses use to make, package or store goods in, not necessarily items consumers buy. Plywood, cardboard boxes, paper pulp, refrigeration gear and packing machinery are considered necessity products for farmers and food producers, which are hard to replace.
Section 338 applies to a specified list of products regardless of whether they qualify for preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA), and stacks on top of any applicable Section 232 tariffs. See Withum’s previous article here: Recent Trade and Tariff Updates: USMCA, IEEPA Refunds and New Tariff Actions. With these new changes in the Canadian tariff list now in effect, U.S. importers should immediately review their Canadian imports, confirm HTS classifications, assess potential duty exposure and evaluate the impact on the overall cost of importation.
Increasing tariffs signify a substantial shift in global trade policy. Withum can assist your business in creating an actionable plan to drive decision-making using our proprietary scenario modeling tool and our expertise in global trade, supply chain, transfer pricing and tariffs.
The U.S. Treasury Department has proposed regulations that would implement the 21st Century ROAD to Housing Act, which restricts certain large institutional investors from purchasing single-family homes beginning January 7, 2027. Under the law, the restrictions generally would apply to an investor engaged in the business of investing in, owning, renting, managing or holding single-family…
The IRS released the November 2026 applicable federal rates (AFRs), which are higher than October’s. Accordingly, any client planning an intrafamily loan, an installment sale to a grantor trust or a seller-financed sale has only a few days left to lock in October’s lower rates. Current Rate Change As published under IRC §1274(d), October 2026…
California Senate Bill 1435 corrects a conformity omission affecting business interest deductions for taxpayers subject to California personal income tax. Signed September 14, 2026, the law adds R&TC §17225(c), providing that the federal limitation under IRC §163(j) does not apply for California personal-income-tax purposes for taxable years beginning on or after January 1, 2025. Individuals…
