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.
The U.S. Court of International Trade’s October 29, 2026, order in Freestyle World, Inc. v. CBP provides an update on CAPE Phase 3 and processing of IEEPA tariff refunds. The court noted that CAPE Phase 3 covered “finally liquidated entries filed by plaintiffs for which the court has ordered reliquidation, including those subject to protest.” For such entries, the court confirmed its understanding that plaintiffs in individual cases may process their IEEPA refund claims through Phase 3:
The court also noted that CBP’s refund FAQs did not yet address the absence of a protest withdrawal requirement for Phase 3. Citing CBP’s declaration, the order reported that, as of October 23:
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.
CAPE Phase 3 officially launched on October 6, 2026, but U.S. Customs and Border Protection (CBP) has strictly limited participation to Importers of Record (IORs) who are active plaintiffs in pending court litigation. See Withum’s previous article here: Recent Tariff Developments: Canada, IEEPA Refunds and Russian Energy. CAPE Phase 3 access continues on a rolling basis, with CBP notifying eligible plaintiffs through counsel. The next CAPE progress report is due November 10, with a closed settlement conference scheduled for November 12.
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.
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