On July 20, 2026, President Donald Trump became the first U.S. president to impose tariffs under Section 338 of the Tariff Act of 1930, commonly known as the Smoot-Hawley Tariff Act. This move targets Canadian products amid ongoing trade tensions and marks a significant moment in U.S. trade policy history.

Legal scholars Peter E. Harrell and Jennifer Hillman of Georgetown University have provided expert analysis on the prospective legal challenges these tariffs may face. Harrell, a Visiting Scholar at Georgetown's Institute for International Economic Law and a leading trade law attorney, and Hillman, a professor of practice at Georgetown University Law Center and co-director of the Center for Inclusive Trade and Development, have been instrumental in shaping arguments that previously led to the Supreme Court invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

Section 338 authorizes the President to impose duties up to 50% ad valorem to offset burdens or disadvantages imposed by a foreign country on U.S. products or vessels. Historically, Sections 317 and 338 were used as leverage in trade negotiations during the 1920s and 1930s, with the last notable consideration by the State Department occurring in 1949 concerning potential trade issues with Communist China. However, any use must be based on evidence of discrimination or unfair treatment, not merely on a partner's failure to comply with trade agreements.

The tariffs against Canada are set to take effect on August 19, 2026, but President Trump and Canadian Prime Minister Mark Carney may still negotiate a détente, potentially incorporating the tariffs into ongoing USMCA negotiations.

This development follows a series of unprecedented tariff actions by the Trump administration, including the first-ever use of Section 122 "fallback" tariffs after a Supreme Court ruling, extensive use of Section 301 tariffs covering nearly 99% of U.S. trade, and 17 Section 232 national security investigations—more than all previous presidents combined.

Legal experts caution that courts may narrow the scope of Section 338 or require the tariffs to be tailored to approximate the alleged harm caused by Canadian trade practices. The situation remains fluid as negotiations and potential legal battles unfold.

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