Trump Rolls Back Some Tariffs, Escalates Trade War With Canada

President Donald Trump rolled back tariffs on toilet paper and rock salt, even as the trade war with Canada escalates with new bans and tariffs.

Trump further expanded Section 338 tariffs against Canadian imports and banned some Canadian products entirely. The bans, effective September 29, include Canadian beer, wine, distilled spirits, whey, molasses, and motorcycles. Peter Harrell, a Georgetown University trade policy expert, summarized the new restrictions. The pretext for these moves is Canada's imposition of counter-tariffs in response to Trump's initial Section 338 actions.

Section 338 of the Trade Act of 1930 authorizes the President to ban imports if a foreign country has discriminated against US commerce and maintained or increased discriminations after a tariff action. Trump is reportedly the first President to impose tariffs under Section 338. The Cato Institute and Professor Ilya Somin filed an amicus brief in the US Court of Appeals for the Federal Circuit, supporting cases against Trump's Section 122 tariffs.

In February 2026, the Supreme Court invalidated massive tariffs Trump attempted to impose under the International Emergency Economic Powers Act (IEEPA). The Cato Institute brief argues Section 122 cannot be used in current circumstances, as it applies to fundamental international payments problems under a fixed exchange rate system. The escalation of the trade war is coming at a difficult time for Senate Republican candidates, who must defend the administration's economic record while pushing back against Trump's targeting of Canadian products. Canada's Conservative leader is heading to the U.S. to promote Canada amid the escalating trade war.