Trump Rescopes 50% Canada Tariffs: Plywood Out, Cocoa and ACs In

Starting October 30, U.S. importers of plywood, certain industrial machinery and select packaging and paper materials will drop off the 50% tariff list covering Canadian goods, while cocoa powder, carpets and air conditioners join it. President Donald Trump signed the proclamation Friday, adjusting the Section 338 duties he first ordered in July against what amounted to $20 billion in Canadian imports.

The move reshuffles costs across mode and commodity lines. Packaging and paper buyers catch a break; food processors importing cocoa powder and retailers stocking carpets and air-conditioning units now face the full 50% levy. For forwarders, the October 30 effective date means reclassifying lanes and repricing entries on short notice.

Why the list changed

Trump invoked Section 338 of the Trade Act of 1930 in August to impose the levies after negotiations between the two countries collapsed. The statute lets a president impose tariffs of up to 50% to counter discrimination against U.S. commerce. Trump alleged Canada unfairly imposed duties and quotas on U.S. car imports, halted purchases of U.S. alcohol, and set tariff-rate quotas on certain dairy products.

In Friday's proclamation, Trump said senior executive branch officials advised him that narrowing the covered goods list would still offset the alleged discrimination while serving the public interest. That is the entirety of the stated rationale. No compensation or offset for newly tariffed importers was mentioned.

How the trade war escalated

The timeline is compressed and consequential:

• July: Trump orders 50% tariffs on roughly $20 billion of Canadian imports.
• Mid-August: Canadian Prime Minister Mark Carney calls off trade talks; the levies take effect.
• September: Carney introduces matching retaliatory tariffs against the U.S.
• Trump's response: He expands the tariff scope and imposes import bans on specialty cheeses, boats and furniture.
• Friday: The latest rescission-and-expansion proclamation.

Each round added cost and uncertainty for shippers on both sides of the border. The September Canadian retaliation, matched to U.S. duty levels, effectively doubled the burden on bilateral trade flows that had previously moved largely duty-free under the USMCA framework.

Can the tariffs survive court?

The rescoping lands the same week as a direct legal challenge. The Liberty Justice Center, on behalf of food importer Gellert Global Group, filed suit at the Court of International Trade seeking removal of the tariffs. The suit argues Trump did not meet Section 338's requirements to implement the duties, and questions whether the 1930 statute remains usable given more recent legislation governing trade remedies.

The stakes for importers are concrete: beyond removing the tariffs, the plaintiffs asked the court to block collection of the duties and order refunds for importers who have already paid. If the court grants refunds, Gellert and similarly situated importers could recover substantial sums on entries made since August — though any ruling is months away at best.

For carriers and forwarders, the immediate commercial read is mixed. Removing plywood, machinery and paper from the list relieves pressure on northbound-sourced building-material and industrial supply chains, some of which had shifted sourcing or absorbed duty costs. Adding cocoa powder, carpets and air conditioners pushes new compliance work onto food and consumer-goods importers just ahead of the holiday stocking season.

Watch the Court of International Trade docket and the October 30 effective date. A refund order or an injunction would force rapid repricing of Canada lanes; absent that, expect Ottawa to scrutinize the revised list for its next retaliatory move.