Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Motor Vehicles
Record date: 2026-07-23
( printed page 46663) Proclamation 11048 of July 20, 2026 Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Motor Vehicles A Proclamation 1. Section 338 of the Tariff Act of 1930 ( 19 U.S.C. 1338 ) (section 338) empowers the President to, among other things, impose duties on imports of a foreign country to offset the burden or disadvantage from a foreign country's discrimination against or unequal imposition on the commerce of the United States. 2. Canada, through discrimination against or
What this record contains
- Federal Register document
- 2026-14997
- Publication date
- 2026-07-23
- Citation
- 91 FR 46663
- Issuing office
- Executive Office of the President
Official record excerpt
( printed page 46663) Proclamation 11048 of July 20, 2026 Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Motor Vehicles A Proclamation 1. Section 338 of the Tariff Act of 1930 ( 19 U.S.C. 1338 ) (section 338) empowers the President to, among other things, impose duties on imports of a foreign country to offset the burden or disadvantage from a foreign country's discrimination against or unequal imposition on the commerce of the United States. 2. Canada, through discrimination against or an unreasonable and unequal imposition on U.S. auto and auto parts exports, burdens U.S. commerce but not the commerce of other countries and disadvantages U.S. commerce compared to the commerce of other countries. Specifically, Canada imposed a tariff system on only U.S. motor vehicles and treats the commerce of foreign countries more favorably than commerce of the United States with respect to motor vehicles, as defined in Canada's United States Surtax Order (Motor Vehicles 2025), SOR/2025-118. By denying to the commerce of the United States the benefits afforded to like commerce from other countries, Canada discriminates against U.S. commerce, disadvantaging the commerce of the United States compared to the commerce of other countries. And Canada's imposition on U.S. motor vehicles is unreasonable, is not equally applied upon the like articles of every foreign country, and places a burden on the commerce of the United States but not on the commerce of other countries. 3. Since April 9, 2025, Canada has maintained a 25 percent tariff rate on imports of U.S. motor vehicles that do not qualify for preferential, duty-free treatment under the United States-Mexico-Canada Agreement (USMCA). For U.S. motor vehicles that do qualify for preferential, duty-free treatment under the USMCA, Canada applies a 25 percent tariff rate on the value of all goods that do not originate in Canada or Mexico used in the production of the vehicle, up to 85 percent of the total value of the vehicle. In addition, Canada maintains a tariff-rate quota (TRQ) on U.S. motor vehicles that qualify for preferential, duty-free treatment under the USMCA. The TRQ for each automaker limits duty-free access for the covered motor vehicles from that automaker up to certain annual quantities (in-quota quantities) and applies the tariffs described above on products that exceed the in-quota quantities. The TRQs are granted to induce companies to invest in production in Canada, and Canada has announced that it reduced the TRQs for U.S. companies that moved manufacturing from Canada to the United States. Canada does not publicly disclose the company-specific, in-quota quantities, but it has published these new tariff rates in Customs Notice 25-15: United States Surtax Order (Motor Vehicles 2025). 4. The United States, U.S. businesses and workers, and U.S. commerce suffer from Canada's discriminatory, unequal, and unreasonable tariff scheme. Following the implementation of the tariff scheme, U.S. exports of motor vehicles to Canada fell precipitously. Comparing the period from April 2025 through March 2026 to the same period in 2024-2025, imports of U.S. ( printed page 46664) motor vehicles to Canada decreased by approximately 22 percent (from approximately $25.9 billion to approximately $20.3 billion). 5. Canada only applies the tariff scheme to U.S.-origin motor vehicles. The tariff scheme does not apply to the motor vehicles of any other country. Indeed, exports of motor vehicles from other countries to Canada have increased to meet the demand previously filled by U.S. exports. For example, comparing the period from April 2025 through February 2026 to the same period in 2024-2025, Canadian imports of Mexican motor vehicles increased by approximately 23.6 percent, and imports from Japan, Korea, and Germany increased by rates ranging from approximately 10.1 percent to approximately 13.5 percent. In total, Canadian imports of motor vehicles from countries other than the United States increased by approximately $2.85 billion over the same period, with Mexico accounting for almost $2 billion of the increase. 6. Accordingly, pursuant to section 338, I find as a fact that Canada is discriminating against the commerce of the United States through Canada's motor vehicle tariff scheme. I also find as a fact that this discrimination places the commerce of the United States at a disadvantage compared to the commerce
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