A proclamation signed Oct. 23 puts 50% tariffs on Canadian carpets, vinyl flooring and air conditioners from Oct. 30 and drops plywood and packaging from the list.
I cover these moves for store owners at Ecommerce Paradise because a tariff list is really a supplier price list in disguise. If you sell flooring, climate control, freezers, power tools or outdoor gear, the added lines land on your shelves, and a supplier that pays a 50% duty will push some of it into your wholesale cost.
Below: what the proclamation changes, how Section 338 got here (including my earlier piece on the lawsuit against the Canada tariffs), what I’d do about it, and six steps to finish before Oct. 30. One ground rule: I have not seen the annex itself, so every product named here comes from the outlets cited, and you need exact tariff codes from your supplier before you change a price. If you are new to this model, my guide to high-ticket dropshipping explains why supplier cost moves hit it so hard.
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Trump Signs Canada Tariff Swap: 22 Lines Out, About 100 In
President Trump signed a proclamation on Friday, Oct. 23, that modifies which Canadian products carry the additional 50% duty under Section 338 of the Tariff Act of 1930, according to Supply Chain Dive. The changes take effect Oct. 30.
Supply Chain Dive reports that plywood, certain industrial machinery and select packaging and paper materials come off the list. Cocoa powder, carpets and air conditioners go on, along with what the outlet calls a “bevy of other imports.”
CTV News, in a story carried by CP24, names seaweed, packing boxes and some plywood sheets as removals. Its additions are cocoa powder, vinyl flooring, shampoos and carpets. Hashtag Investing counted the annex at 22 tariff lines removed and 100 added, with air conditioners and chest freezers up to 800 liters, valves, electric hand tools, canoes and archery gear among the additions.
The three accounts overlap on carpets, cocoa powder and plywood and differ on the rest. That is normal for a technical annex summarized three ways, and it is the reason to work from tariff codes instead of product names.
Robert Glasgow, an international trade lawyer at KPMG Law, told CTV that more items were added than removed. He said the changes will “likely have a relatively small impact in the immediate term.” Barry Appleton, another international trade lawyer, said Washington “moved some bricks around” rather than lowering tariffs, and that overall U.S. tariff policy is unchanged.
Politics drove the timing, per both lawyers. Senator Susan Collins, a Republican from Maine who is running for re-election, said she secured exemptions for Maine agricultural products including blueberry, potato, apple and seaweed, according to CTV.
No deal is in sight yet. Prime Minister Mark Carney said Canada could sign “this afternoon” if Washington were ready, while Trump said the U.S. has “all the cards,” per CTV. Glasgow said a broader deal is unlikely within weeks.
How Section 338 Put 50% on Canadian Furniture and ATVs
Section 338 went unused by any president until July 2026, and the administration reached for it after the Supreme Court invalidated the IEEPA tariffs, as I laid out when the Gellert lawsuit was filed. The July 20 proclamation (No. 11048) imposed the 50% duty, and it took effect Aug. 22 after a temporary suspension lapsed, according to the Federal Register filing for the September follow-up.
That follow-up, Proclamation 11065, was signed Sept. 8 and took effect Sept. 15. It kept the 50% on items including paper, aluminum and steel products, furniture, seating, golf carts and lamps, and it removed salt, Portland cement, refined lead, switchgear and fishing rod parts. So the Oct. 23 proclamation is the second rewrite of the list in about six weeks.
Supply Chain Dive says the original July tariffs covered about $20 billion in Canadian imports. Carney ended trade talks in mid-August, and Canada answered with retaliatory tariffs in September.
Two features of the regime matter for importers. C.H. Robinson’s customs advisory says USMCA-qualifying goods are not excluded, so the 50% applies to them, and that Section 338 duties have no time limit. The same advisory lists goods already subject to Section 232 tariffs as an exception, while the September proclamation text says its duties apply in addition to Section 232 duties. Sources read that interaction differently, so have a customs broker confirm it for any SKU that could fall under both.
The legal fight is early. Gellert Global Group, a food importer, sued Oct. 20 at the Court of International Trade, represented by the Liberty Justice Center. No ruling exists, and a proposed class is not a certified class. For a separate refund fight that did reach class status, see my note on the court certifying a tariff refund class.
What 50% on Carpets and ACs Does to Your Supplier Costs
My read is that this swap raises exposure for home and outdoor stores even if the first dollars are small. Glasgow counted more additions than removals, and the split matters more than the count. The removals are industrial inputs: packaging, machinery, plywood. The additions are finished goods that sit in retail categories, so a store owner sees little of the relief and most of the cost.
Start with who pays. The importer of record pays the duty at the border. In most dropship setups that is your supplier or their distributor, not you, and you feel it as a revised price list, a MAP change or a backorder. If you import from Canada yourself, the 50% lands in your cost directly, and my supplier vetting checklist is the place to start asking who actually brings the product in.
Here is hypothetical math, not a reported figure. Say a chest freezer lists at $900, your supplier cost is $540, and your gross margin is $360 per sale, or 40%. The unit is Canadian-made with a customs value of $400, so a 50% duty adds $200. If the supplier passes all of it through, your cost becomes $740 and your gross margin falls to $160, or 17.8%. To get back to $360 you would need a $1,100 price, which is 22% higher. Duty is assessed on customs value, not on your retail price, so your real numbers will differ.
The categories are not equal. Air conditioners and chest freezers are the highest-ticket additions, so the dollar hit per unit is largest and the pause threshold arrives first. Electric hand tools, canoes and archery gear are narrower categories, where one Canadian maker can supply most of what a dealer can actually buy, so there may be no second source to switch to. Carpets and flooring are bulky, so a 50% duty plus freight can leave a thin product with no margin at all. Plywood and packaging relief helps whoever builds or ships the product, and it will reach you slowly, if at all.
Origin decides everything, and it is not where the brand has its headquarters. Plenty of brands that look American make certain lines in Canada, and the annex works on where the goods were made. Get country of origin by SKU in writing. I keep a rule of thumb for what comes next: if the added cost is under 10% of retail price, raise the price; between 10% and 20%, re-quote the supplier and test; above 20%, pause the ads and look for a different origin. That is my threshold, not a formula, and the freezer above sits past it. Freight leans on the same math, since LTL rates now sit more than 80% above 2018 levels, according to the AFS freight index I covered, so a heavy appliance gets expensive to move twice if you have to switch suppliers.
Timing is the second lever. The September proclamation applied to goods entered for consumption or withdrawn from warehouse on or after its effective time. If the Oct. 30 text follows the same pattern, inventory already entered carries no new duty, and supplier repricing could arrive in waves instead of all at once. I’d expect price-list updates to trickle in through November, right as Lowe’s starts Black Friday on Oct. 29 and shoppers compare every number. Demand is not generous either, with consumer sentiment at 46.3 and durables buying sinking, so price moves need testing instead of faith.
Keep the other side of the ledger in view. The NY Fed’s work on tariff price effects says pass-through takes up to a year, which argues against a one-day catalog repricing. A deal, a court order or another rewrite could reverse this. Washington has changed the list twice since September, and Glasgow’s own reading is that the immediate impact is small. So reprice the exposed SKUs and leave the rest alone. Scheduled changes, like the ones in Shopify Rollouts, make that easy to undo.
Track the duty as its own cost line so your margin report by SKU stays honest, whether you do that in Finaloop or a spreadsheet. If duties are eating margin, you want to see it by product, not as a vague dip in the monthly average.
This is the reason I keep telling people to line up more than one supplier per category. A single supplier whose product is made in Canada turns a tariff proclamation into your problem overnight. If you want my team to build or rebuild a store around redundant sourcing, the turnkey service is the fastest route.
Want to pressure-test your supplier list against the new Canada annex with other store owners instead of guessing alone? Join the Skool community →
Canada Tariff Checklist for Stores Before Oct. 30
Six steps, in order. The first two cost nothing and tell you whether the rest matter.
- Export your catalog and flag every SKU in flooring, carpets, air conditioners, freezers, power tools, canoes and archery gear. If your products sync through Inventory Source, pull the SKU list from there so you are not hunting product by product.
- Email each supplier for country of origin, the tariff code and whether they are importer of record, and ask when they will publish new pricing. Get the effective date in writing, because it decides whether your Black Friday promo math still works.
- Calculate duty per unit for every flagged SKU using the freezer example above and apply the 10% and 20% thresholds. Schedule the price changes in Shopify for SKUs that cross them instead of editing live prices by hand. Before you cut or keep ad spend on those products, reread my Google Shopping guide.
- For any SKU past 20%, find a second source with a different country of origin, and browse Wholesale2b for candidates. Then re-quote freight on the replacement, since oversized goods can erase the savings. For parcel-size items, Easyship compares carriers quickly.
- Tell customers early. Add delay and price-change language to your order confirmation flow in Klaviyo. Then update your support macros in Gorgias so every agent gives the same answer, because surprise price changes and late shipments are how disputes start.
- Run your holiday stress test with the new costs in it, using my Black Friday checklist. If you want a second set of eyes on your catalog, grab a time on my discovery call page.
Frequently Asked Questions
When do the Canada tariff changes take effect?
Oct. 30, according to Supply Chain Dive. The September proclamation applied to goods entered or withdrawn from warehouse on or after its effective time, so confirm the entry-date rule in the new text with your broker.
Do I pay the tariff as a dropshipper?
Only if you are the importer of record. In most dropship arrangements your supplier or their distributor imports the goods, and you see the cost as a higher wholesale price. If you are a Canadian operator selling into the U.S., read my guide to starting a business in the USA from Canada.
Does USMCA exempt my products?
No, per C.H. Robinson’s advisory on the Section 338 duties. USMCA-qualifying goods are not excluded, and the 50% applies to them.
Will the lawsuit get these tariffs refunded?
Nobody knows. Gellert Global Group filed Oct. 20, no court has ruled, and the proposed class is not certified. For other tariffs, my note on Phase 3 of the tariff refunds shows that only plaintiffs qualified, so do not budget on a refund.
Which of my product categories are exposed?
The reported additions are carpets, vinyl flooring, air conditioners, chest freezers, electric hand tools, canoes, archery gear and some packaging goods, but confirm by tariff code. If you are still choosing categories, my high-ticket niches list helps you weigh sourcing risk. The free niches download is the fastest way to start.
Should I raise prices on everything now?
No. Raise prices only on SKUs where your supplier confirms a Canadian-origin cost increase. If a replacement supplier is overseas, payment fees come with it. Airwallex is one way to pay them. My setup guide shows how to avoid overpaying on fees.
Want my team to build and run a high-ticket store that does not hang on one supplier’s price list? See the turnkey done-for-you service →
Tariff lists will keep moving through the holidays, and a store that checks supplier costs every week reacts faster than one that hears about it from an angry customer. I will keep flagging the ones that touch your costs. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.
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Trevor Fenner is an ecommerce entrepreneur and world traveler from Seattle, Washington, and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.
He maintains homes in Seattle and Bali, spends most of the year overseas, and usually returns to Seattle for about a month each summer.
