Trump Exempts Some Canadian Products From Section 338 Tariffs - But his Illegal Trade War Continues - Reason Magazine

Trump did not end the Section 338 trade measures against Canada. He changed which products were covered. The White House said the changes take effect October 30. Some goods became exempt, while other goods were newly targeted.

Plywood sheets, some paper products, certain machinery, refrigeration equipment, and packing crates and boxes were removed. Some valves, carpets, waste products, and other goods were added. The tariffs reportedly remain set at 50%, even for products covered by the United States-Mexico-Canada Agreement.

The change may have been designed to reduce political pressure. The article links it to Maine Senator Susan Collins and other Republicans worried about voter backlash before the midterm election. Still, the broader trade war continues. The article argues that courts should strike down the remaining tariffs and import bans because they exceed lawful presidential authority.

A tariff is a government charge placed on goods entering a country. In ordinary usage, the importer pays it to customs. The article reports that Trump’s Canadian tariffs are set at 50%. That rate applies whether or not the product qualifies under the United States-Mexico-Canada Agreement.

If an imported product is valued at $100, a 50% tariff would generally mean $50 in tariff charges. The importer may absorb that cost, pass it to a retailer, or include it in the final price. The exact effect depends on contracts, competition, and other costs. These details are general tariff mechanics, not additional claims from the article.

The article emphasizes that Americans can bear the burden. Businesses may face more expensive inputs, while consumers may pay more for affected goods. That domestic impact challenges the idea that tariffs burden only foreign producers. It also helps explain their political unpopularity.

Trump’s proclamation changed the coverage rather than eliminating the Canadian tariff program. The White House announced that several product categories would no longer face the Section 338 tariffs. The revisions take effect October 30.

Removed items include plywood sheets, some paper products, certain machinery, refrigeration equipment, and certain packing crates and boxes. Added items include some valves, carpets, waste products, and other goods. The article does not identify every product in either category. It reports that the tariffs remain 50% according to CNBC.

This swap matters because businesses cannot treat the announcement as a general return to normal trade. Some companies received relief, but others became newly exposed. The article also notes that the tariffs apply whether or not goods originate under the United States-Mexico-Canada Agreement. Most of the tariff program therefore remains in place, alongside separate import bans.

Tariffs on Canadian goods do not affect only Canadian exporters. American importers generally face the tariff charge when goods enter the country. Businesses can absorb the cost, change suppliers, or pass it along through prices. Consumers may then pay more for products affected by the policy.

The article points to Maine as a concrete example of domestic harm. It says American businesses and consumers in states like Maine are suffering from the tariffs. The 50% rate, reported by CNBC, applies even when products qualify under the United States-Mexico-Canada Agreement. That makes the financial impact potentially broad for covered goods.

The political consequence is also important. The article says the tariffs have become highly unpopular and are a drag on Republican prospects in the upcoming midterm election. It suggests that concern about voter backlash may explain why Trump removed some products, while adding others. The broader tariff program still remains contested.

Section 338 is part of the Tariff Act of 1930. In this dispute, Trump relies on it to impose tariffs on Canadian products and to ban some Canadian imports entirely. The article presents that presidential power as limited by conditions written into the statute and by constitutional principles.

According to the article, Section 338 requires the foreign actions at issue to discriminate against United States goods. It also requires presidential tariffs to offset those actions. The challengers argue that Canada’s actions do not meet the discrimination requirement and that Trump’s tariffs go far beyond any offset. The article says Trump’s administration interprets the provision more broadly.

That interpretation is now being tested in court. The Liberty Justice Center filed the first lawsuit challenging the Section 338 tariffs against Canadian imports. Its complaint raises five arguments, including statutory limits, the major questions doctrine, and nondelegation. The article says the challengers need to win on only one argument.

The lawsuit attacks the tariffs on five separate grounds. First, it says later legislation superseded Section 338. Second, even if the provision remains operative, the Canadian actions do not discriminate against United States goods as the statute requires. These arguments challenge both the law’s continued use and the facts supporting the tariffs.

The challengers also say the tariffs do not offset Canada’s actions. Instead, they go far beyond them. They argue that the administration’s interpretation raises a major question requiring clearer congressional authorization. Finally, they say giving the executive this power would violate the constitutional nondelegation doctrine, which limits transfers of legislative power.

The Liberty Justice Center included all five claims in its complaint. The article stresses that the organization needs to win only one. Section 338 import bans are also described as illegal, but those bans are not directly challenged in this lawsuit. Future litigation may address them.

The Constitution’s basic structure gives Congress authority over taxation and trade, while the president administers and enforces laws. That division prevents one executive from exercising unlimited legislative power. The article frames tariffs as a form of taxation and says Trump’s trade actions may usurp Congress’s power.

Congress can authorize presidential action through legislation, but the authorization must have legal boundaries. Here, the challengers argue that Section 338 either does not cover Trump’s actions or gives him power too broadly. They invoke the nondelegation doctrine, which restricts Congress from transferring its legislative authority to the executive without sufficient limits.

This constitutional question matters beyond Canada. If courts accept the challengers’ position, presidential power to impose or lift tariffs could narrow. The article says giving one person power to impose and remove tariffs whenever he wishes affronts the rule of law. Courts have been urged to strike down the remaining measures.