President Trump’s recent proclamations introduce Section 338 tariffs on Canada, adding a 50 percent duty to roughly $20 billion of imports and setting a new precedent for trade enforcement under the 1930 Tariff Act.
Scope of the new Canadian duties
The three proclamations target distinct product groups. The automobile proclamation lists a wide array of items, from flowers and essential oils to industrial fatty acids, chemicals, and various wood products such as MDF, plywood, and veneers. The alcoholic‑beverages proclamation narrows the focus to spirits, wines, and related goods, while also covering wooden tableware, baskets, and paperboard. The dairy proclamation limits itself to dairy items, non‑alcoholic beer, and molasses.
These Section 338 duties will stack on existing tariffs, antidumping, and countervailing measures, including those imposed under Section 301. Goods that already face Section 232 duties are exempt, but USMCA‑compliant products receive no special exemption. The tariffs become effective 30 days after the July 20 announcement, on August 19, though the administration acknowledges that the ongoing USMCA negotiations could prompt adjustments before that date.
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IEEPA refund litigation and processing
The International Emergency Economic Powers Act (IEEPA) refund process remains in flux. Phase 1 and Phase 2 of the refund program stay open for submissions, yet the status of refunds for entries liquidated after 80 days is still before the U.S. Court of International Trade and the Court of Appeals for the Federal Circuit. On July 15, Judge Richard Eaton signaled that a forthcoming order will require U.S. Customs and Border Protection (CBP) to re‑liquidate certain “finally liquidated entries” among roughly 3,700 pending cases tied to the CAPE Phase 3 rollout.
CBP reported that about $121.75 billion in refund claims have entered its system, with $86.3 billion already cleared for payment. More than 229,000 applications covering 24.4 million import entries have been received as of July 10.
Trade fraud enforcement strategy
The Department of Justice, together with the Department of Homeland Security, issued a guide outlining the joint Trade Fraud Task Force’s enforcement approach. The guide explains the entry process, the civil and criminal statutes applicable to trade fraud, and the range of resolutions available to authorities. It also highlights compliance considerations for enterprises of all sizes, emphasizing the need for strong internal controls to avoid violations of customs regulations and anti‑fraud laws.
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Section 232 investigations broaden
Section 232, the trade authority linked to national‑security concerns, continues to be applied to new industries. In a separate move, the government launched a Section 232 probe into coal and coal‑derived products, extending the security review into the energy sector. This follows prior actions targeting steel, aluminum, copper, automobiles, semiconductors, pharmaceuticals, timber, and other strategic supply chains.
For businesses that rely on imported inputs, these overlapping trade measures create a complex compliance environment. Companies must track multiple authorities—Section 338, Section 301, Section 232, and IEEPA—while also managing ongoing litigation that could alter refund eligibility. The layered duties mean that even products already subject to existing tariffs may see additional costs, potentially squeezing margins and prompting supply‑chain adjustments.
Prepare now.
