Tariff Act of 1930, Section 338

Whenever the President shall find as a fact that any foreign country places any burden or disadvantage upon the commerce of the United States by any of the unequal impositions or discriminations aforesaid, he shall, when he finds that the public interest will be served thereby, by proclamation specify and declare such new or additional rate or rates of duty as he shall determine will offset such burden or disadvantage, not to exceed 50 per centum ad valorem or its equivalent, on any products of, or on articles imported in a vessel of, such foreign country.

- Tariff Act of 1930, § 338(d), , 19 U.S.C. § 1338(d)

What Is the Tariff Act of 1930, Section 338?

Start with who owns the power, because everything else follows from it. Congress owns the power to impose tariffs. The President does not have it on his own. When Congress hands a piece of that power to the executive, it hands over a narrow piece for a specific circumstance, and the question in every one of these cases is whether the administration is reading a very narrow power very broadly.

Section 338 is a piece of the Smoot-Hawley Tariff Act, enacted June 17, 1930, and it is a discrimination provision rather than a general tariff power. Here is the machinery. Subsection (a) says the President shall proclaim additional duties only after he finds as a fact that a country either imposes an unreasonable charge on U.S. goods that it does not enforce equally against everyone else, or discriminates against U.S. commerce in a way that puts American commerce at a disadvantage. Subsection (d) then caps what that finding buys him. He declares a rate that will offset the burden, not to exceed 50 per centum ad valorem. Subsection (b) goes further and lets him exclude the country's products entirely if the discrimination continues. Subsection (g) gives the Tariff Commission the job of ascertaining discriminations and reporting them to the President.

Notice the shape of that delegation, because it matters. The statute does not say the President may set whatever tariff he thinks is good policy. It says he makes a factual finding, and then calculates a number that offsets the specific burden he found. That is the kind of delegation that has historically been easiest to defend, the President doing arithmetic that Congress does not want to redo every six months. It is a very different thing from deciding we do not like how a country is behaving, so we are raising the tariff. The first is math. The second is policy, and policy is the part Congress kept.

On July 20, 2026, the administration took three separate Section 338 actions against Canada, each imposing an additional 50 percent duty on a different category of goods, motor vehicles, alcoholic beverages, and dairy. The stated findings are Canadian tariffs and quotas on U.S. autos, provincial restrictions on U.S. alcohol, and dairy quotas the fact sheet describes as more restrictive on U.S. cheese than on EU cheese. The duties take effect 30 days after signing, and they apply to all covered goods regardless of whether a good originates under the USMCA. Note that every one of those findings is a policy grievance about how Canada runs its own market, and that the rate landed on the statutory maximum in all three.

The reason to watch this one is that the authority is essentially untested. Reporting on the July 2026 proclamations describes Section 338 as unused since at least the 1940s, and Philip Zelikow, quoted by Ilya Somin, argues it was superseded by the trade legislation Congress enacted in 1962 and 1974 and is therefore defunct. Nobody knows if that is right, because a statute nobody uses generates no case law. The timing tells you something too. The Supreme Court struck down the IEEPA tariffs in February 2026, holding that an emergency delegation is a narrow one, and Section 338 is the authority the administration reached for next. As of this writing no challenge has been filed. Expect one.