Trump Reshuffles 50% Canada Tariffs: Plywood Out, Cocoa In

Starting Oct. 30, plywood, certain industrial machinery and select packaging and paper materials will drop out of the 50% tariffs on Canadian imports, while cocoa powder, carpets and air conditioners will fall under them for the first time. President Donald Trump signed the proclamation Friday, reworking the scope of levies he first ordered in July on what then amounted to $20 billion in Canadian goods.

For importers and the architects, builders and fabricators who buy from Canada, the practical effect is a swap rather than relief. Materials that moved freely across the border before October — plywood among them — re-enter tariff-free circulation. Consumer and interior goods that previously escaped the levies now carry the full 50%.

Why did the tariff list change?

Trump acted, he said in Friday's proclamation, after senior executive branch officials advised him that narrowing and reshaping the list of covered goods "would still offset the alleged discrimination while serving the public interest."

The legal vehicle remains Section 338 of the Trade Act of 1930, a statute Trump leveraged in August after negotiations between the two countries broke down. The provision lets a president impose tariffs of up to 50% to address discrimination against U.S. commerce. In ordering the original duties, 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.

How did the trade war escalate?

The timeline matters for anyone tracking exposure.

• July: Trump orders 50% tariffs on roughly $20 billion in Canadian imports.
• Following month: The action triggers a month of trade talks between Washington and Ottawa.
• Mid-August: Canadian Prime Minister Mark Carney calls off the discussions; the levies take effect.
• September: Carney introduces retaliatory tariffs matching the U.S. rates.
• Trump's response: He expands the scope of the levies and imposes import bans on specialty cheeses, boats and furniture.

Friday's proclamation continues that sequence, adjusting rather than withdrawing the measures.

What does the new lawsuit argue?

The changes arrive the same week the Liberty Justice Center filed suit at the Court of International Trade on behalf of Gellert Global Group, a food importing company, seeking removal of the tariffs altogether.

The suit argues Trump did not meet the requirements Section 338 sets out before a president may act. It also casts doubt on whether the 1930 statute still applies, given more recent legislation. Beyond striking the tariffs, the plaintiffs asked the court to block collection of the duties and order refunds for importers who have already paid.

The refund demand is the detail importers should watch. If the court sides with Gellert Global Group, every Section 338 payment made since August could come back — a liability reversal with direct balance-sheet consequences for firms that have priced the 50% into their supply contracts.

What changes for practitioners now?

In the short term, procurement teams buying Canadian plywood, industrial machinery and packaging or paper materials gain cost certainty as of Oct. 30. Those sourcing cocoa powder, carpets or air conditioners from Canada face a 50% duty where none existed last month.

The litigation timeline will determine whether any of this holds. A ruling against the tariffs would unwind both the original levies and Friday's reshuffled list; a ruling for the administration would cement Section 338 as a durable instrument in U.S.-Canada trade relations, and one Canadian retaliation has already shown it will match.