President Trump announces U.S. counter-tariffs on Canada: Are they lawful?

On September 8, 2026, President Trump announced new counter-tariffs on Canada in response to Canada’s late August counter-tariffs on the United States.

Latest U.S. counter-tariffs target dairy, motorcycles and alcohol

The U.S. counter-tariffs ban certain Canadian products from entering the U.S. and modify the tariffs on Canadian goods previously announced on July 20, 2026. The newest counter-tariffs include:

• Banning certain alcoholic beverage imports including beer, wine and spirits
• Imposing 50% tariffs on certain dairy products, primarily cheese
• Banning certain whey product imports
• Banning motorcycle imports
• Imposing 50% tariffs on certain paper and metal products, including specified aluminum, iron and steel goods

The import bans take effect on September 29, 2026, while the changes to previously announced tariffs take effect on September 15, 2026.

Presidential tariff powers

Article I of the U.S. Constitution grants Congress the exclusive authority to impose tariffs on foreign nations. However, Congress has enacted several statutes that delegate tariff authority to the president in specific circumstances.

Six statutory provisions may authorize the president to issue tariffs:

• Section 232 of the Trade Expansion Act of 1962
• Section 201 of the Trade Act of 1974
• Section 301 of the Trade Act of 1974
• The International Emergency Economic Powers Act of 1977 (IEEPA);
• Section 122 of the Trade Act of 1974
• Section 338 of Tariff Act of 1930

The first three provisions require an investigation before tariffs may be imposed, while the latter three permit the president to act without a prior investigation.

Last year, President Trump imposed tariffs under IEPPA following the declaration of a national emergency relating to illicit drugs. In early 2026, however, the U.S. Supreme Court held that IEPPA does not authorize the president to impose tariffs.

Following that decision, President Trump imposed a 10% tariff on foreign goods under Section 122 of the Trade Act of 1974, becoming the first president to invoke that provision. Section 122 authorizes temporary tariffs to address international payment issues, including balance of payments deficits. More than two dozen states have since filed a lawsuit challenging the legality of the Section 122 tariffs.

Most recently, President Trump has relied on Section 338 of the Tariff Act of 1930 to impose tariffs targeting Canada. Section 338 authorizes the president to impose tariffs on countries that engage in unfair or discriminatory trade practices against the United States. Enacted during the Great Depression, Section 338 had never been used before President Trump invoked it earlier this year. In announcing the latest round of counter-tariffs, President Trump cited Canada’s recent retaliatory tariffs on U.S. steel, dairy and agricultural equipment as discriminatory.

Legality of Section 338 of the Tariff Act of 1930

Whether the latest round of counter-tariffs will withstand judicial scrutiny remains an open question. As noted above, the U.S. Constitution grants Congress the exclusive authority to impose tariffs, and the president may only do so where Congress has delegated that power. Some legal scholars argue that Section 338 has been superseded by later legislation, including the Trade Expansion Act of 1962 and the Trade Act of 1974.

At the same time, because the latest round of counter-tariffs come in response to Canada’s counter-tariffs which took effect in September 2026, there is an argument that Canada engaged in discriminatory trade practices against the United States. If accepted, that position could support the president’s authority to invoke Section 338 and the latest round of counter-tariffs.

To date, no legal challenges have been brought against the use of Section 338.

MLT Aikins continues to monitor developments in the Canada-U.S. tariff landscape. If your organization would like assistance in assessing how these new tariffs may affect your operations or cross-border strategy, please reach out to the MLT Aikins Corporate and Commercial and Competition/Antitrust, Investment and Trade teams.

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