Volume I, No. XVI
As Section 338 moves to import bans, the trade commission asks how to do the monitoring job the 1930 statute gave it
The U.S. International Trade Commission wants comments by November 9 on how to carry out section 338(g), its duty to track foreign discrimination against U.S. commerce and advise the President. The request arrives a day after the first exclusion orders against Canadian goods.
The U.S. International Trade Commission has asked the public to tell it how to perform a duty it has carried since 1930 and, by its own account, no longer has a practice for performing. In a notice issued September 4 and published in the Federal Register on September 9, the Commission requests comments in docket MISC-053 on section 338(g) of the Tariff Act of 1930, which makes it the Commission’s duty to “ascertain and at all times to be informed” whether foreign countries discriminate against U.S. commerce and to bring such conduct to the President “together with recommendations”1,5. The timing gives the request its weight. On September 8, the day before publication, the President ordered certain Canadian alcoholic beverages and dairy products moved from a 50 percent duty under section 338 to an outright import ban3,4. The presidential side of the statute has now been used at both of its stages. The Commission’s side, the part designed to supply the facts, is only now being rebuilt.
The instrument: two channels in one section
Section 338 was enacted on June 17, 1930, and carries forward section 317 of the Tariff Act of 19225. Most of its subsections run through the President. Under subsection (a) he may declare new or additional duties when he finds as a fact that a country imposes an unreasonable charge or limitation “not equally enforced” on like articles of every foreign country, or discriminates in fact against U.S. commerce5. Subsection (d) caps those duties at 50 percent ad valorem and delays them 30 days; subsection (b) lets him exclude a country’s products altogether if it has “maintained or increased its said discriminations” after a first proclamation; subsection (e) reaches benefits that flow to an industry in a third country5.
Subsection (g) is different in kind. It assigns the Commission a standing obligation to monitor the discriminations listed in (a), (b) and (e) and to report them with recommendations5. The text does not make that report a condition of presidential action. ArentFox Schiff, in an alert published September 11, reads the statute the same way: unlike section 301, section 338 “does not appear to require an agency investigation or determination before tariffs may be imposed,” and unlike section 122 it appears to carry no time limit7. The two channels can therefore run separately, and in 2026 they have. The September 8 alcohol proclamation recites that the President received “information, opinions, and recommendations” from “senior executive branch officials”4. The Commission’s one named role in that proclamation is to be consulted by Customs and Border Protection on any further changes to the tariff schedule4.
The Commission’s notice treats its own role as obligatory. It calls the duty “mandatory pursuant to the statute,” and then states plainly that it “does not currently have an established practice” for identifying discriminatory actions, collecting information about them or reporting to the President1. It adds that “Thoroughness, impartiality, and nonpartisanship are essential to carrying out this work”1.
What the Commission is asking, and what changes for filers
The notice poses five groups of questions1. The first is definitional: what makes foreign conduct “unreasonable” or “discriminatory” in international commerce, and how the Commission should read those terms. The second asks for evidence of how countries burden U.S. commerce in the three ways the statute describes: unequal charges or limits on U.S. goods in transit or re-export, discrimination through customs, tonnage or port duties, classifications and prohibitions, and discrimination whose beneficiary is a third country’s industry1,8.
The third and fourth groups are procedural, and they are where the policy choices sit. The Commission asks how it should gather information, how sensitive that information is, and whether the protections for confidential business information and privacy are adequate1. It names a specific deterrent: the risk that disclosure of a firm’s participation “might prompt direct or indirect reprisal from a foreign government”1. It asks whether it should investigate and report on specific allegations or work only from aggregated information, whether material gathered under section 338 may be reused for section 332 fact-finding reports without the provider’s permission, and what factors should shape its recommendations1. It also asks whether to keep its reports to the President confidential, as it historically did, and what it should tell the public1.
Filing follows the Commission’s ordinary rules. Submissions go through the Electronic Document Information System or by email, citing MISC-053, by 5:15 p.m. on November 91. Confidential material must be bracketed and marked under 19 CFR 201.6; everything else will be posted or made available for inspection1. ArentFox Schiff suggests the Commission could end up with procedures resembling its other dockets, for reviewing “allegations of discrimination submitted by companies or individuals” and letting others respond7. Sandler, Travis & Rosenberg describes the request as one that “could be an opportunity for the trade community to help shape potential future Section 338 tariffs”8.
Who bears the cost of a section 338 exclusion?
The import bans show what the statute’s second stage does to trade. Proclamation 11056 had suspended the July duties for three days, after officials reported that Canada had “expressed a commitment to remove” the measures at issue, and moved their effective date to August 222. According to the September 8 proclamation, Canada “reneged on its commitment” on August 21, the suspension lapsed, and on August 27 the Government of Saskatchewan announced a 50 percent levy on U.S. alcoholic beverages from September 8, “expressly in response” to the U.S. duties4. On that record the President found that Canada had “maintained or increased” its discrimination, the finding subsection (b) requires4,5.
For importers the consequences are concrete. Listed Canadian alcoholic beverages imported on or after 12:01 a.m. eastern time on September 29 are excluded4. Goods imported before that moment but not yet entered for consumption remain dutiable at 50 percent4. If a court invalidates the ban for any import, the proclamation provides that the 50 percent duty applies to it instead4. The White House fact sheet says a parallel ban covers certain dairy and other products, that rock salt and cement leave the tariff list while items from all-terrain vehicles to additional dairy products join it on September 15, and that the duties apply regardless of USMCA origin and in addition to section 232 tariffs3.
The two governments describe the dispute differently. The administration says Canada broke off talks in August and, on September 8, put retaliatory tariffs on about $20 billion of U.S. exports, including steel, dairy and agricultural equipment3. By the proclamation’s own account, Saskatchewan announced its levy expressly as a response to the U.S. duties; the administration counts it as an increase in discrimination all the same4. The statute does not ask which framing is correct. It asks only for the President’s finding5.
The Commission’s request affects a wider group. Morgan Lewis advises that exporters facing foreign tariffs, regulatory barriers, customs practices or market-access limits consider filing, and that importers and companies with global supply chains have their own interest in how the Commission defines actionable discrimination and what evidence it requires6. ArentFox Schiff adds foreign producers and governments to the list of possible participants7. A practice under which any firm can bring an allegation would widen the pipeline of potential section 338 cases; a confidential, aggregated practice would narrow it. The notice leaves both open1.
The body receiving the comments has also changed. Morgan Lewis reports that four of the six sitting commissioners, including Chairman Brett Doyle, joined between July and August 2026, and that Commissioner Samuel Negatu was sworn in on September 10, filling all six seats for the first time in about a decade6.
The longer view: from the Tariff Commission’s discrimination files to a dead letter and back
The notice is partly a history of the Commission’s own past1. Under section 317 of the 1922 Act, the Tariff Commission ran formal investigations into discrimination by individual countries, on its own initiative, at the President’s request or on private petitions, and sent questionnaires to U.S. consular officials and exporters; the notice cites the Commission’s 1923 annual report for that procedure1. After 1930 the work became “more informal and less public,” conducted mostly through the State Department, because of what the Commission called the sensitive nature of the investigations1. The cases it took up ranged from inconsistent duty calculations by French customs officials to an Australian requirement that U.S. products include their “inland carriage” in duty assessments, and it reported on them in its annual reports into the 1940s1.
The General Agreement on Tariffs and Trade changed the premise. Once Article I bound members to most-favored-nation treatment, some policymakers asked whether section 338 was a “dead letter”1. A 1971 Senate Finance Committee staff print proposed that such laws be amended or repealed rather than “left as dead letters on the statute books”; the Treasury Department answered in 1973 House testimony that section 338 was a “useful authority against foreign countries which discriminate” and asked that it not be repealed1. The Trade Act of 1974 left it untouched1. Morgan Lewis notes that no President appears to have used it to restrict trade before 20266.
This journal examined the July proclamations when the duty stage began, and observed that subsection (b) had never been applied. It now has been, with the alcohol ban taking effect September 294. ArentFox Schiff reports that the Commission described its notice as the product of “several years of internal deliberation”7. Comments close on November 91. Whether the Commission’s eventual practice will feed findings into future proclamations, or run beside a presidential channel that has already acted twice without it, the notice does not say.