{"id":11577,"date":"2026-07-30T14:07:03","date_gmt":"2026-07-30T18:07:03","guid":{"rendered":"https:\/\/spiegelryan.com\/?p=11577"},"modified":"2026-07-30T15:26:14","modified_gmt":"2026-07-30T19:26:14","slug":"u-s-raises-tariffs-on-certain-canadian-goods-to-50-what-it-means-for-your-contracts","status":"publish","type":"post","link":"https:\/\/spiegelryan.com\/en\/2026\/07\/30\/u-s-raises-tariffs-on-certain-canadian-goods-to-50-what-it-means-for-your-contracts\/","title":{"rendered":"U.S. Raises Tariffs on Certain Canadian Goods to 50%: What It Means for Your Contracts"},"content":{"rendered":"<p>On July 20, 2026, President Donald J. Trump signed three proclamations imposing an additional 50% duty on a wide range of Canadian products, effective August 19, 2026. The proclamations are framed around the motor vehicle, dairy, and alcoholic beverage sectors, but each one\u2019s product list reaches well beyond that sector. The extra 50% is charged on top of duties that already apply cannot be avoided through preferential treatment under the Canada-United States-Mexico Agreement (CUSMA)<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a>. For Canadian exporters, U.S. importers, and any business with cross-border supply chains, these measures may significantly affect the cost of doing business under current and future contracts.<\/p>\n<h1>Summary of What Was Announced<\/h1>\n<ul>\n<li><strong>Rate: <\/strong>A further 50% duty layered onto the affected Canadian-origin goods.<\/li>\n<li><strong>Effective date: <\/strong>The tariffs are planned to come into force on August 19, 2026.<\/li>\n<li><strong>Legal basis: <\/strong>The proclamations rely on a law (section 338 of the <em>Tariff Act of 1930<\/em>) that authorizes the President to add duties when a foreign country is found to discriminate against U.S. trade.<\/li>\n<li><strong>Stacks on existing duties: <\/strong>The extra 50% is added on top of whatever duty already applies, and it is not avoided by CUSMA preferential treatment.<\/li>\n<\/ul>\n<h1>The Three Tariff Measures<\/h1>\n<p>Each proclamation identifies a specific Canadian measure but sweeps in goods well beyond<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a> the named sector:<\/p>\n<p><strong>Motor Vehicles.<\/strong> Since April 2025, Canada has maintained a 25% tariff on U.S. motor vehicles that do not qualify for CUSMA preferential treatment; for vehicles that do qualify, it applies a 25% tariff on any non-Canadian\/non-Mexican content. Canada also sets per-automaker tariff-rate quotas (TRQs) <a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a> under its United States Surtax Order (Motor Vehicles 2025) SOR\/2025-118 and reduced the in-quota amounts available to U.S. automakers that moved manufacturing from Canada to the United States. The U.S. proclamation characterizes this scheme as discriminatory because it targets only U.S.-origin vehicles, and states that it caused U.S. motor vehicle exports to Canada to fall by approximately 22%. The product annex goes well beyond motor vehicles, also covering consumer electronics, industrial machinery, leather goods, furniture, plastics and rubber articles, textiles, chemicals, and wood and paper products.<\/p>\n<p><strong>Dairy.<\/strong> The stated rationale is a comparison between Canada\u2019s CUSMA TRQ and its Comprehensive Economic and Trade Agreement between Canada and the European Union<strong> (<\/strong>CETA)<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a> cheese TRQ. Under CETA, retailers may access the quota; under CUSMA, only producers, processors, and distributors qualify. The proclamation frames this gap as treating U.S. exporters less favourably than their EU counterparts and points to a decline in U.S. dairy sales to Canada. The product annex covers a broad range of dairy and food-related goods, including milk and cream products, whey and casein derivatives, bakery mixes, molasses and syrups, non-alcoholic beer, hop cones, and peppermint essential oil.<\/p>\n<p><strong>Alcoholic Beverages.<\/strong> Triggered by provincial bans on U.S. alcoholic beverages that the proclamation says caused an approximately 81% drop in U.S. alcohol exports to Canada. The product annex covers beer, wine, and spirits, but also extends to hockey equipment, citrus essential oil, wooden kitchenware, and certain grades of writing and printing paper.<\/p>\n<h1>Scope of the Product Annexes<\/h1>\n<p>Whether a particular product is caught by the new duty depends on its HTSUS<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a> tariff classification and whether that classification appears in one of the three annexes. The annexes are lengthy and item-specific, so the categories listed above are illustrative only. The proclamations and their full annexes can be accessed at the following links:<\/p>\n<ul>\n<li><a href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/2026\/07\/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united-states-with-respect-to-motor-vehicles\/\">Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Motor Vehicles \u2013 The White House<\/a><\/li>\n<li><a href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/2026\/07\/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united-states-with-respect-to-dairy\/\">Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Dairy \u2013 The White House<\/a><\/li>\n<li><a href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/2026\/07\/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united-states-with-respect-to-alcoholic-beverages\/\">Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Alcoholic Beverages \u2013 The White House<\/a><\/li>\n<\/ul>\n<p><strong>Notable Exclusions <\/strong><\/p>\n<p>The proclamations carve out energy products, potash, fish, and critical minerals. Goods already subject to duties under Section 232 of the\u00a0<em>Trade Expansion Act of 1962<\/em>\u00a0(such as steel, aluminum, and copper) are likewise excluded.<\/p>\n<h1>Who May Be Affected<\/h1>\n<p>Businesses that may be most exposed to the new tariffs include:<\/p>\n<ul>\n<li>Canadian manufacturers and exporters selling into the U.S. market;<\/li>\n<li>Companies with integrated cross-border supply chains, where components cross the border multiple times; and<\/li>\n<li>Parties to existing supply, distribution, and procurement contracts that did not anticipate a tariff increase of this magnitude.<\/li>\n<\/ul>\n<h1>Commercial-Contract Steps to Consider Now<\/h1>\n<ol>\n<li><strong>Review your key agreements.<\/strong> Examine supply, distribution, procurement, and sale agreements to determine which party bears the increased duty cost. Focus on price provisions, tariff\/duty-allocation clauses, and delivery-term provisions.<\/li>\n<li><strong>Assess price-adjustment and cost pass-through rights.<\/strong> Determine whether existing contracts permit price increases or surcharges to reflect the new duties, and on what notice.<\/li>\n<li><strong>Evaluate force majeure and change-in-law clauses.<\/strong> Assess whether these provisions are triggered by the new tariffs and what relief (suspension, renegotiation, cost sharing) they afford or termination. Note that narrowly drafted force majeure clauses may not cover government-imposed tariffs.<\/li>\n<li><strong>Consider termination and renegotiation options.<\/strong> Review termination and renegotiation clauses, and prepare a negotiation strategy with counterparties.<\/li>\n<li><strong>Address the tariffs in new contracts.<\/strong> Build in clear tariff-allocation, change-in-law, price-adjustment, and termination language to allocate this risk going forward. Consider including tariff-specific definitions, periodic repricing mechanisms, and the right to terminate or renegotiate if cumulative duty rates exceed an agreed threshold.<\/li>\n<\/ol>\n<h1>How We Can Help<\/h1>\n<p>We can help you review existing contracts and advise on your rights, develop renegotiation strategies and draft new provisions that clearly allocate tariff risk.<\/p>\n<p>For more information about the commercial-contract implications of these tariff measures, don\u2019t hesitate to contact us or any member of our team.<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> CUSMA (the Canada-United States-Mexico Agreement) is the free trade agreement among Canada, the United States, and Mexico that replaced NAFTA. It generally allows qualifying goods to move between the three countries with reduced or no tariffs.<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> The itemized list of specific goods, identified by tariff code, to which the new 50% duty applies.<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> A tariff-rate quota (TRQ) is a system where a set quantity of a product can be imported at a low or zero tariff rate; amounts above that quantity are subject to a much higher tariff.<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> CETA (the Comprehensive Economic and Trade Agreement) is a separate free trade agreement between Canada and the European Union that provides preferential tariff treatment for qualifying goods.<\/p>\n<p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a> HTSUS (the Harmonized Tariff Schedule of the United States) is the official U.S. reference listing tariff classifications and duty rates for every category of imported good. Each product is assigned a specific code that determines what duties apply.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On July 20, 2026, President Donald J. Trump signed three proclamations imposing an additional 50% duty on a wide range of Canadian products, effective August 19, 2026. The proclamations are framed around the motor vehicle, dairy, and alcoholic beverage sectors, but each one\u2019s product list reaches well beyond that sector. The extra 50% is charged [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-11577","post","type-post","status-publish","format-standard","hentry","category-business-law"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>U.S. Raises Tariffs on Certain Canadian Goods to 50%: What It Means for Your Contracts - Spiegel Ryan<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/spiegelryan.com\/en\/2026\/07\/30\/u-s-raises-tariffs-on-certain-canadian-goods-to-50-what-it-means-for-your-contracts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"U.S. Raises Tariffs on Certain Canadian Goods to 50%: What It Means for Your Contracts - Spiegel Ryan\" \/>\n<meta property=\"og:description\" content=\"On July 20, 2026, President Donald J. 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