A new 50% U.S. tariff on selected Canadian goods has taken effect, adding costs for American lubricant manufacturers that import certain additive packages from Canada, according to the Independent Lubricant Manufacturers Association.
The tariff is the latest development in deteriorating U.S.-Canada trade relations. President Donald Trump imposed the additional 50% duties after the U.S. administration accused Canada of discriminatory treatment of American exports. Section 338 of the U.S. Tariff Act allows the president to impose duties of up to 50% where a foreign country is deemed to have imposed an unequal burden or discrimination on U.S. commerce.
The tariff applies to specified Canadian-origin goods classified under HTSUS 3811.21.00, covering additives for lubricating oils containing petroleum oils. The measure took effect Aug. 22.
ILMA has warned that the tariff will particularly affect U.S. blenders using Canadian detergent and dispersant additive packages.
“These are not finished consumer products,” ILMA said in its tariff advocacy, describing the products as manufacturing inputs incorporated into lubricants and greases produced at U.S. facilities.
Manufacturers cannot necessarily switch to another additive package if Canadian supplies become uneconomic, the association said. Lubricant formulations often have to meet engine-oil performance categories, original equipment manufacturer specifications and individual customer requirements. Changing an additive package can require reformulation, laboratory and field testing and customer approval, with the process taking months or longer for some applications.
ILMA said the impact could be particularly difficult for independent lubricant manufacturers already dealing with higher base-oil costs, supply constraints and tighter supplier credit.
The association had asked the administration to remove 3811.21.00 from the tariff action. Alternatively, it sought a 180-day suspension to give manufacturers time to assess domestic availability, reformulation requirements and qualification timelines.
The U.S. imported $513.7 million of products classified under 3811.21 in 2024, according to UN Comtrade data compiled by the World Bank. Canada supplied $63 million, representing about 12.3% of total U.S. imports in the category and roughly 15.5 million kilograms of product.
At a 50% tariff rate, a similar annual flow would represent about $31.5 million in additional duties before any costs are absorbed by suppliers or passed through the supply chain.
The measures cover about $27.6 billion of Canadian goods. Canada has responded with matching tariffs on a dollar-for-dollar basis, with counter-tariffs of 15%, 25% and 50% scheduled to take effect Sept. 8 on selected U.S. products.
The trade in lubricant additives is substantial in both directions. The U.S. exported $234.8 million of products in the same category to Canada in 2024, equivalent to 43.2 million kg and almost four times the value of Canadian exports to the U.S.
The figures reflect the wider integration of the two countries’ energy and lubricant industries. The U.S. is Canada’s main export market for petroleum and refined products, while lubricant companies in both countries serve customers on either side of the border.
The new tariff therefore adds a significant cost to Canadian additive supplies entering the U.S., while U.S. additive manufacturers continue to have substantial access to the Canadian market.