Section 338 vs. Section 232 vs. Reciprocal Tariffs: What's the Difference?

Short answer: “reciprocal tariffs” ran on IEEPA emergency powers and no longer exist — the Supreme Court struck them down in February 2026. What’s actually in effect on Canadian goods right now runs on two different, older statutes: Section 338 (up to 50%, used against Canada specifically since July 2026) and Section 232 (national-security tariffs on lumber, steel, and aluminum, applied by product rather than by country). Section 122 and Section 301 are two more tools in the same post-IEEPA toolkit, used elsewhere in the broader tariff regime but not behind the current Canada-specific duties.

Side by side

	IEEPA “reciprocal tariffs”	Section 122	Section 301	Section 232	Section 338
Statute	International Emergency Economic Powers Act	Trade Act of 1974	Trade Act of 1974	Trade Expansion Act of 1962	Tariff Act of 1930
Status as of August 2026	Struck down by the Supreme Court, February 2026	Active	Active	Active	Active — revived July 2026
Basis for the tariff	Presidential emergency-powers declaration	Balance-of-payments deficit	Foreign country’s unfair/discriminatory trade practices	National security threat from an import	Foreign country discriminating against U.S. commerce
Rate cap	None set by statute (this is what the Court found problematic)	15%	No statutory cap	No statutory cap	Up to 50%
Duration	N/A — no longer usable	150 days, then requires Congressional approval to continue	No automatic sunset	No automatic sunset	No automatic sunset
Process before taking effect	Presidential declaration only	Presidential declaration only	Formal investigation, up to ~9 months	Commerce Department investigation	Presidential proclamation
Used on Canada, August 2026	No — struck down before this round	Cited in the broader 2026 tariff regime, separate from the Canada-specific action	Cited in the broader 2026 tariff regime, separate from the Canada-specific action	Yes — existing softwood lumber duties	Yes — the dairy, alcohol, and “Motor Vehicles” tariffs imposed July-August 2026

Why did “reciprocal tariffs” go away?

The U.S. Supreme Court ruled in February 2026 that IEEPA — a law written to let the president respond to foreign threats and emergencies, not to set ordinary trade policy — didn’t clearly delegate Congress’s tariff-setting power to the executive branch, per Holland & Knight’s analysis of the ruling. That removed the legal basis for the reciprocal-tariff program that had been in place through 2025 and early 2026. The Committee for a Responsible Federal Budget estimates the replacement tariffs under Section 301 and Section 338 have recovered less than 60% of the federal revenue the IEEPA tariffs were generating — a gap that’s part of why the administration has kept adding new actions under the surviving statutes rather than replacing IEEPA with one single substitute.

Why does Canada face two different tariff authorities at once?

Because the two authorities were built for different purposes and happen to both apply to Canadian goods right now. Section 232’s lumber and timber tariffs — a 10% duty on top of separate antidumping and countervailing duties — apply to lumber imports by product, regardless of which country they come from; Canada is affected because it supplies roughly three-quarters of U.S. softwood lumber imports, not because the tariff singles Canada out by name. That 10% rate is only the raw-lumber floor, not the ceiling: the same Section 232 proclamation also covers finished wood products at meaningfully higher rates — upholstered furniture at 25%, rising to 30% on January 1, 2026, and kitchen cabinets and vanities at 25%, rising to 50% on January 1, 2026 — so a renovation involving cabinetry faces a materially steeper tariff than lumber alone would suggest. Section 338, by contrast, was invoked specifically against Canada in July 2026 over accusations that Canadian trade practices discriminate against U.S. commerce — it targets the country directly, and its 50% rate is stacked on top of whatever Section 232 duties a covered product already carries. See Canadian lumber tariffs and your mortgage or renovation costs for how that stack adds up on a single product.

Which one is most likely to end soon?

Section 122, on paper — it’s the only one of the four still-active authorities with a hard statutory clock, expiring after 150 days unless Congress votes to extend it. Section 301, Section 232, and Section 338 tariffs have no built-in expiration and stay in effect until the administration lifts them, which is one reason this site treats the current tariff landscape as an ongoing situation rather than a fixed, resolved policy. See what the U.S.-Canada trade war means for household debt for the current state of negotiations specifically.

Questions & Answers

Are reciprocal tariffs still in effect in 2026?

No. The U.S. Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) — the legal basis for "reciprocal tariffs" — in February 2026, ruling the law didn't clearly give the president that authority. The administration replaced them with tariffs under Section 122, Section 301, and Section 338 instead.

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— US Debt Compass Editorial Team

Which tariff authority was used against Canada in August 2026?

Section 338 of the Tariff Act of 1930, via three Presidential Proclamations issued July 20, 2026 covering dairy, alcoholic beverages, and a broad "Motor Vehicles" category. The existing softwood lumber duties Canada also faces run on a separate authority, Section 232.

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— US Debt Compass Editorial Team

Which of these tariffs expires automatically?

Only Section 122 has a built-in expiration — a 150-day cap, after which Congress has to approve an extension. Section 301, Section 232, and Section 338 tariffs have no automatic sunset and stay in place until the administration lifts them.

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— US Debt Compass Editorial Team