US drops 50% tariffs on Canadian plywood, adds cocoa and carpets

Market Context & Direct Impact

The U.S. is reshuffling its 50% Section 338 tariffs on Canadian goods, with the changes starting 30 October. A proclamation Trump signed on Friday, 23 October, takes plywood, certain industrial machinery and select packaging and paper materials out of the levy. Cocoa powder, carpets and air conditioners move onto the list instead. Bloomberg names bleached paper, cartons and specialized agricultural machinery as the exempted goods, so press accounts differ on the exact scope. Match each HTS code against the signed annex before relying on any list.

Canada's retaliation and a court challenge leave the outcome open. Canada's surtaxes of 15%, 25% or 50% on certain U.S.-origin goods have applied since 8 September, and officials have held no new substantive talks since August. Food importer Gellert Global Group sued on 20 October at the Court of International Trade, seeking to halt collection and win refunds for importers. A U.S. official says the swap keeps the overall tariff impact unchanged. Coverage also links the timing to Maine Senator Susan Collins's re-election campaign, which may benefit from it.

Core Executive Takeaways

• Plywood relief, new dutiesPlywood and some paper and packaging leave the 50% list from 30 October, while cocoa powder, carpets and air conditioners join it.
• Court case could reverseGellert Global's suit could still unwind the duties, so importers should not treat the current scope as settled.
• Canadian retaliation persistsCanada's 15%, 25% and 50% surtaxes appear to remain in place, so cross-border lanes carry duty cost in both directions.

Strategic Playbook

1. 1
   Re-screen Canadian HTS lines

   Match every Canadian-origin HTS code against the signed annex before 30 October, because press accounts disagree on which goods are exempted.

2. 2
   Track entries and refunds

   Log entry dates, duties paid and supplier origin for every Section 338 good, so you can claim refunds if the Court of International Trade case succeeds.

Filed 09:26 GMT, 26 October 2026, for the first edition of 26 Oct.
As agents only.

Sources

1. Trump tweaks Canada tariffs, removing certain goods while adding othersSupply Chain Dive, published 23 October 2026
2. Trump expands tariff exemptions for Canadian goodsTT, published 23 October 2026
3. Coffins and Canoes From Canada Get 50% Tariff Under New Trump OrderBloomberg, published 23 October 2026
4. Trump faces suit over 50% Canada tariffsTT, published 21 October 2026
5. Customs Notice 26-23: United States Surtax Order (2026)Canada Border Services Agency, published 23 October 2026

Claims ledger: 11 facts and where each comes from

• A proclamation Trump signed on a Friday, 23 October 2026, means the 50% tariff no longer applies to plywood, certain industrial machinery and select packaging and paper materials, starting 30 October.¹
• Cocoa powder, carpets and air conditioners are among the imports that will now be subject to the 50% levies.¹
• Bloomberg reports the U.S. will remove 50% tariffs on Canadian plywood, bleached paper, cartons and specialized machinery for agriculture.³
• A White House fact sheet dated 23 October says duties on certain valves, carpets, waste products and others will replace the removed tariffs.²
• A U.S. official says the add-and-remove changes leave the overall tariff impact unchanged.²
• Section 338 allows a U.S. president to impose tariffs up to 50% to counter discrimination against U.S. commerce.¹
• Food importer Gellert Global Group sued the Trump administration on 20 October, challenging the 50% Section 338 tariffs on Canadian goods.⁴
• The lawsuit, filed at the Court of International Trade, asks the court to block collection of the tariffs and order refunds for importers.¹
• Canada applies a surtax of 15%, 25% or 50% of value for duty on certain U.S.-origin goods, effective 8 September 2026, and CBSA updated its notice on 23 October 2026.⁵
• Trade talks between the U.S. and Canada have produced no new substantive discussions since the August negotiations collapsed.²
• The move may help boost Republican Senator Susan Collins's re-election campaign in Maine.²

Every figure above is tied to a cited source that was checked on the day of filing. Found an error? Tell the desk.