Skip to content
Breaking
Most tourists skip this Japanese town. A Singaporean just spent seven figures opening a hotel there.Bursa Malaysia ends flat as investors await earnings for directionAWS launches RM1.5 billion cloud-skills training for Malaysian studentsNVIDIA launches NVLink Fusion to speed semi-custom AI factory buildsNVIDIA ships Groq 3 LPX to power Vera Rubin’s agentic AIUS Section 338 tariffs raise Canada's average US tariff to 6.27%Global food supply has become ‘collateral damage’ in conflicts: UNIran sanctions threaten RM1.8bn in Malaysian tradeIran warns new US sanctions will bring 'consequences' as rial hits record lowUN peacekeepers killed in South Sudan ambushSelangor declares Sept 1 a public holiday after Sukma successSelangor top Sukma medal tally - their best in 28 yearsCan Trump’s ‘economic D-Day’ force Iran to back down?Hot hatch record: Hyundai Ioniq 5 N delivers 641 hpDBS vs OCBC vs UOB: Which Bank Delivered the Best Results and Dividend?JCI Rises as Asian Markets Rally on U.S. Economic Data, China SignalsNew Economic Gateways: How Capital Is Redrawing Asia’s Urban MapFBM KLCI rebounds on US growth upgradeCGS International lifts KLCI 2026 target to 1,810 on ringgit strengthGamuda to export AI tunnel-boring system to US and IndiaMost tourists skip this Japanese town. A Singaporean just spent seven figures opening a hotel there.Bursa Malaysia ends flat as investors await earnings for directionAWS launches RM1.5 billion cloud-skills training for Malaysian studentsNVIDIA launches NVLink Fusion to speed semi-custom AI factory buildsNVIDIA ships Groq 3 LPX to power Vera Rubin’s agentic AIUS Section 338 tariffs raise Canada's average US tariff to 6.27%Global food supply has become ‘collateral damage’ in conflicts: UNIran sanctions threaten RM1.8bn in Malaysian tradeIran warns new US sanctions will bring 'consequences' as rial hits record lowUN peacekeepers killed in South Sudan ambushSelangor declares Sept 1 a public holiday after Sukma successSelangor top Sukma medal tally - their best in 28 yearsCan Trump’s ‘economic D-Day’ force Iran to back down?Hot hatch record: Hyundai Ioniq 5 N delivers 641 hpDBS vs OCBC vs UOB: Which Bank Delivered the Best Results and Dividend?JCI Rises as Asian Markets Rally on U.S. Economic Data, China SignalsNew Economic Gateways: How Capital Is Redrawing Asia’s Urban MapFBM KLCI rebounds on US growth upgradeCGS International lifts KLCI 2026 target to 1,810 on ringgit strengthGamuda to export AI tunnel-boring system to US and India
AI Edge

US Section 338 tariffs raise Canada's average US tariff to 6.27%

Three presidential proclamations issued on 20 July 2026 invoked Section 338 of the US Tariff Act of 1930 against Canada, the first use of the statute since the 1940s. The measures took effect on 22 August, raising Canada's average US tariff by 1.89 percenta…

Source: Global Trade Alert · August 24, 2026 at 8:01 PM · AI-assisted report

Single-source
US Section 338 tariffs raise Canada's average US tariff to 6.27%
Photo: Peter P. Othagoer / CC BY 4.0

KUALA LUMPUR, 25 AUGUST 2026 —

Listen to this article

DomainFork Audio · read aloud

Share

Three presidential proclamations issued on 20 July 2026 invoked Section 338 of the US Tariff Act of 1930 against Canada, the first use of the statute since the 1940s. The measures took effect on 22 August, raising Canada's average US tariff by 1.89 percentage points to 6.27%, according to implementing guidance published by US Customs and Border Protection on 21 August.

Market Impact

The duties cover $17.7 billion of Canadian goods, with most lines subject to the full 50% rate. USMCA certification offers no relief. Motor-vehicle goods account for 95% of the covered value, yet none of the 439 affected lines appear in the tariff schedule's vehicles chapter, with most classified as furniture parts.

The motor-vehicle basket's effective Section 338 rate is 36.0% after carve-outs, including $2.5 billion excluded due to existing Section 232 duties and $3.2 billion of aircraft-related lines paying 5% instead of 50%. Alcohol and dairy products face the full 50% rate with no carve-outs.

Canada's trade-weighted US tariff stood at 4.68% before the Section 122 surcharge lapsed on 24 July. It rose to 6.27% on 22 August as Section 338 entered into force, making it the second-largest layer in Canada's applied rate after Section 232. The largest covered line, boards and panels for electric control ($1.7 billion), pays no Section 338 duty because it is already covered by Section 232 carve-outs.

The second-largest line, network and data-transmission equipment ($0.8 billion), pays an effective 5% through the civil-aircraft list, while plastic bags ($0.7 billion) face the full 50%. Liqueurs and cordials ($0.4 billion) is the only alcohol line in the top ten, and no dairy line ranks among the top ten.

By 19 August, $59.9 billion of Canada's 2025 US imports—worth $364.9 billion—paid tariffs unaffected by USMCA. The share of imports shielded by USMCA fell from 85.6% in October 2025 to 82.3%. Section 232 instruments account for 70% of the unavoidable total: steel and aluminium ($30.8 billion), lumber ($5.7 billion), heavy-vehicle parts ($4.2 billion) and copper ($1.4 billion).

Canadian exporters increased USMCA utilisation from 38% to 86% of eligible trade in 2025, yet certifications will not reduce Section 338 duties.

The revival of Section 338 sets a precedent that outweighs the immediate tariff impact. The dormant statute now allows tariffs to override trade agreement preferences based solely on a presidential finding. Carve-outs still permit 82.3% of Canadian export value to reach the US duty-free under USMCA, narrowing the measure only where it overlaps Section 232.

Related: Kuala Lumpur

Reporting based on Global Trade Alert. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.