President Trump signed three proclamations on Monday invoking Section 338 of the Tariff Act of 1930 — a provision of the same Smoot-Hawley legislation that historians credit with deepening the Great Depression — to impose a 50% additional tariff on approximately $20 billion in Canadian goods, according to the White House fact sheet. The last confirmed use of Section 338 dates to 1949, according to legal analysis of Section 338's dormancy by trade lawyers who found no public record of the authority being applied since then. The tariffs take effect August 19, 2026 — 30 days from signing.

The administration chose Section 338 for a specific reason: it has no procedural requirements. Unlike Section 301 of the Trade Act of 1974, which requires an investigation by the U.S. Trade Representative, or Section 232 of the Trade Expansion Act of 1962, which requires a formal national security determination, Section 338 allows the president to act by proclamation alone, as the National Law Review's procedural comparison of tariff authorities explains. The trigger is a presidential finding that a foreign country is discriminating against U.S. commerce — and the maximum rate the law permits is exactly what Trump imposed: 50%, confirmed in the USTR statement on Section 338 action.

"We crossed the Rubicon," said Scott Lincicome, vice president of general economics at the Cato Institute. Lincicome's "nuclear option" characterization was that "the invocation of 338 is the nuclear option for Trump tariffs."

…

Critically, these tariffs apply even to goods that would ordinarily receive duty-free treatment under the United States-Mexico-Canada Agreement, as the White House fact sheet confirms. That USMCA override is not a legal side note — the agreement entered into force in July 2020, and its preferential framework was designed to govern exactly this category of North American trade. The administration is now treating that framework as subordinate to a 1930 law that Congress wrote before the multilateral trade order existed.

…

The administration's choice of Section 338 cannot be understood without context. In February 2026, the U.S. Supreme Court struck down Trump's sweeping tariffs imposed under the International Emergency Economic Powers Act, holding that IEEPA did not grant the president authority to impose broad import duties unilaterally, as SCOTUSblog reported on the ruling. That ruling eliminated the administration's most flexible tariff tool. Section 338, which predates the entire post-WWII trade legal architecture and requires no investigation or hearing, is the alternative statutory hook, as trade analysts covering Section 338 as a post-IEEPA alternative have noted.

Stephen Brown, chief North America economist at Capital Economics, put it plainly in a research note quoted by CNN Business: "Taking a step back, it's striking that the Trump administration is now reaching to a new method to implement tariffs." If Section 338 survives court challenge, he added, it could become a permanent instrument in future trade negotiations.

That question is now the central one for trade lawyers, and the answer is contested. Philip Zelikow, an emeritus history professor at the University of Virginia and a lawyer who participated in the earlier IEEPA litigation, argues that Section 338 was superseded in 1962 and 1974 by the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974. His argument: if Section 338's retaliatory tariff authority were still operative, the procedural requirements Congress established in 1962 and 1974 would be rendered meaningless — legislators would not have enacted detailed investigation and hearing requirements if a president could bypass them by citing a 1930 provision. Zelikow calls Section 338 "long dead, at least since 1962," in his earlier analysis published at the Volokh Conspiracy.

Analysts at the Peterson Institute for International Economics have warned that stretching Section 338 too broadly risks invoking "a substitute authority similar to the one that the Supreme Court just found to be illegitimate," as the Peterson Institute's post-IEEPA analysis notes. Legal challenges are described as near-certain by trade policy watchers following the Section 338 litigation outlook. No court has ever construed Section 338, meaning there is no binding precedent either upholding or invalidating it.

Source

GOP lawmakers from rural areas are pressing for more action to counteract the agriculture industry’s increasingly pessimistic outlook.