Trump Pauses 50% Tariffs on Canadian Imports
President Donald Trump announced last night a three-day pause of the additional 50% tariffs on approximately $20 billion of Canadian goods that had been scheduled to take effect at 12:01 a.m. today, August 19.
The last-minute reprieve comes as welcome news to ILMA members, particularly those facing a 50% tariff on Canadian-origin lubricant additive packages classified under HTSUS 3811.21.00. ILMA has been pressing the administration to remove those products from the tariff action.
President Trump announced the pause on social media, stating that the U.S. and Canada, “subject to the finalization of documents, have a deal.” Canadian Prime Minister Mark Carney separately confirmed that the tariffs have been postponed through the end of Friday, August 21, while the two governments work to complete an agreement.
The Office of the U.S. Trade Representative said the emerging agreement will include “comprehensive market access for all American goods,” economic security commitments and digital trade provisions. Details of the agreement, including its treatment of individual products currently subject to the threatened 50% tariff, have not yet been released.
ILMA cautions members that the tariff has been paused, not permanently withdrawn. Unless the administration takes further action, the additional duties could still take effect after the three-day period. ILMA is closely monitoring the negotiations and the implementing documents expected later this week.
ILMA’s Advocacy
The tariff pause follows direct ILMA engagement with the administration over the potentially severe consequences for members.
ILMA sent a detailed letter to U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick requesting that the Trump administration remove HTSUS 3811.21.00 from the products subject to the additional 50% Section 338 tariff. In the alternative, ILMA requested a 180-day suspension to permit evaluation of domestic availability, reformulation and requalification timelines, and existing base oil supply constraints.
In addition, representatives of an ILMA supplier member and an ILMA manufacturing member met with administration officials to explain directly how the tariff would affect lubricant supply.
“ILMA’s message has been straightforward,” said ILMA CEO Holly Alfano. “Canadian detergent and dispersant additive packages are not finished consumer products. They are critical manufacturing inputs incorporated by American companies into lubricants and greases produced at U.S. facilities.”
Of particular concern, ILMA told the administration that alternative additive packages cannot simply be substituted for Canadian products. Lubricant formulations are qualified through extensive testing and frequently must satisfy engine-oil performance categories, OEM specifications and customer requirements. Changing an additive package can require reformulation, laboratory and field testing, and customer approval — a process that can take months or longer for certain applications.
Impact on ILMA Members
U.S. trade data illustrate the potential magnitude of the issue. In 2024, the U.S. imported approximately $513.7 million of products classified under HTSUS 3811.21.00. Canadian-origin products represented approximately $63 million, or 12.3%, of those imports, making Canada the third-largest foreign supplier. At a 50% tariff rate, comparable annual imports could impose approximately $31.5 million in additional duties.
The effect would not be distributed evenly throughout the industry. It would fall particularly heavily on manufacturers whose existing formulations are qualified using additive packages produced at Canadian facilities.
ILMA also emphasized to the administration that the tariff would arrive while lubricant manufacturers are already managing significant base oil supply disruptions. The combination of higher base oil costs, constrained availability, tighter supplier credit and a potential 50% tariff on certain additive packages could place independent manufacturers at a substantial competitive disadvantage compared with larger, vertically integrated lubricant companies.
What Happens Next
The immediate result of President Trump’s announcement is that the additional Section 338 tariffs scheduled for August 19 will not take effect today. The critical question now is what the final U.S.-Canada agreement provides when the three-day pause expires Friday.
ILMA will continue its engagement with USTR, Commerce and other administration officials and will press for permanent relief for lubricant additives under HTSUS 3811.21.00 if that tariff line is not addressed in the final agreement.
Members should not assume that the 50% tariff has been permanently eliminated. ILMA will provide an update as soon as the administration releases the final agreement or implementing documents and the treatment of Canadian-origin lubricant additives becomes clear.
