ITC Seeks Public Input on Implementation of Long-Dormant Section 338 Trade Authority

The US International Trade Commission (ITC or Commission) is seeking public comments on how it should carry out its statutory responsibilities under Section 338 of the Tariff Act of 1930, a nearly century-old trade statute that grants the president broad authority to impose additional tariffs—and potentially exclude imports altogether—in response to discrimination against US commerce.

Section 338 has previously played little role in modern US trade policy, and the ITC acknowledges that it currently has no established practice for carrying out its responsibilities under the provision. The request for comment comes as a result of the US administration’s increased reliance on a range of statutory authorities to advance its trade and tariff policies, becoming the first administration to invoke Section 338 to impose trade restrictions.

KEY TAKEAWAYS

• Section 338 can authorize additional duties of up to 50% in specified circumstances and, if discriminatory treatment continues, potentially allow the president to exclude designated imports altogether.
• The agency is considering fundamental questions concerning how it will identify discriminatory conduct, gather information, evaluate allegations, protect confidential information, and advise the president.
• The proceeding presents an opportunity for interested parties to influence the framework that could govern future Section 338 matters. Stakeholders that face tariffs, regulatory barriers, customs restrictions, market-access limitations, or other potentially discriminatory measures should consider whether their interests warrant participation.
• Comments are due by 5:15 pm ET on November 8, 2026. The ITC states that submissions may be filed through its Electronic Document Information System (EDIS) or by email.

THE ITC AND THE BROAD AUTHORITY PROVIDED BY SECTION 338

The ITC is an independent, quasi-judicial federal agency tasked with a variety of responsibilities in the area of cross-border trade. Those who are familiar with the ITC know about the agency’s anti-dumping and countervailing duties-focused docket or the fast-paced Section 337 unfair import investigations that have become increasingly popular with patent owners who are seeking injunction-like relief.

Section 338, however, has largely remained unknown until recently, when the US administration invoked its Section 338 authority to impose tariffs on and even exclude a variety of Canadian goods. Section 338 addresses certain forms of discrimination by foreign countries against US commerce.

Among other circumstances, the statute authorizes presidential action where a foreign country imposes an “unreasonable” charge, exaction, regulation, or limitation on US products that is not equally enforced against like products of other countries, or otherwise discriminates against US commerce through customs duties, fees, classifications, regulations, restrictions, prohibitions, or other measures in a manner that disadvantages US commerce relative to that of another country.

The statute additionally contains authority addressing circumstances in which discriminatory treatment benefits an industry in a third country.

The potential remedies are substantial. Subject to the statutory findings and public-interest requirements, Section 338 authorizes the president to impose new or additional duties designed to offset the burden or disadvantage, up to 50% ad valorem or its equivalent. If discrimination continues after presidential action, Section 338 authorizes the president to completely exclude designated products of the offending country from importation into the United States.

Section 338(g) assigns the ITC an ongoing fact-finding and advisory role. The Commission must “ascertain and at all times be informed” as to whether foreign countries are engaging in the types of discrimination identified by the statute and bring any discriminatory conduct to the president’s attention, together with recommendations.

A LONG-DORMANT AUTHORITY ENTERS A NEW PHASE

Despite Section 338’s potentially sweeping remedies, the statute has remained largely unused for decades. The Commission’s Notice explains that its predecessor, the Tariff Commission, once played an active role under Section 338 and its predecessor, Section 317 of the Tariff Act of 1922.

Those activities included investigations of alleged discrimination by individual foreign countries, information gathering from US exporters and consular officials, and recommendations concerning foreign measures affecting US commerce.

After World War II and the development of the multilateral trading system, Section 338 largely fell into disuse. The Commission’s Notice recounts that policymakers questioned whether the provision had become a “dead letter,” although Congress ultimately chose to retain it when enacting newer trade authorities, including Section 301 of the Trade Act of 1974.

No president appears to have used Section 338 to impose trade restrictions before 2026. That changed this summer when President Trump invoked Section 338 to impose additional 50% tariffs on specified Canadian products, bringing a previously untested presidential tariff authority into modern trade policy for the first time. Then, in September, the US administration announced that the tariffs would be expanded, with some converted to outright import bans.

The development is consistent with the US administration’s broader willingness to employ multiple statutory authorities—and, in some instances, novel applications of those authorities—to pursue its trade objectives. Following judicial limitations on tariffs imposed under the International Emergency Economic Powers Act, for example, the US administration has relied on Sections 122 and 301 of the Trade Act of 1974 while continuing to use Section 232 of the Trade Expansion Act of 1962.

Its recent Section 301 actions likewise extended that authority across dozens of trading partners, an application significantly broader than its historical country-specific use.

Against that backdrop, the Commission’s effort to establish procedures for carrying out its Section 338 responsibilities may have implications extending well beyond the immediate request for comments.

ITC CONSIDERATIONS

The ITC is seeking input on several questions that could materially affect how Section 338 operates in practice, including:

• Meaning of “unreasonable” and “discriminatory.” How should those terms be interpreted in the context of international commerce?
• Scope of potentially actionable foreign measures. What types of tariffs, regulations, customs practices, restrictions, limitations, or other measures should be considered burdens on US commerce?
• Information gathering. How should the Commission identify potentially discriminatory foreign conduct and obtain information from companies, trade associations, government officials, and other sources?
• Confidential information and retaliation concerns. What protections are necessary for companies that may face direct or indirect retaliation from foreign governments if they provide information to the Commission?
• Investigative methodology. Should the Commission investigate individual allegations, evaluate broader patterns of conduct, or use some combination of approaches?
• Recommendations to the president. What factors should guide the Commission when determining whether and how to recommend presidential action?
• Transparency. To what extent should Section 338 findings and recommendations remain confidential, and what information concerning the Commission’s activities should be made public?

These questions could shape not only the mechanics of future Section 338 proceedings but also the evidentiary and substantive standards that stakeholders will need to satisfy when seeking Commission attention.

A SIGNIFICANT OPPORTUNITY FOR STAKEHOLDERS

The request for comments provides stakeholders with an unusual opportunity to participate at the formative stage of an agency’s implementation of a longstanding but largely dormant statute. The comments received by the Commission will help guide its next steps in carrying out its Section 338(g) responsibilities.

Unlike more established trade statutes, Section 338 is not accompanied by a mature body of modern agency practice that defines the relevant statutory terms, prescribes how allegations should be presented and investigated, or establishes how the Commission should formulate and communicate recommendations to the president. The Commission’s request therefore raises questions not merely about procedural details but about how Section 338 will function in practice.

Those questions may be particularly consequential given the breadth of the underlying authority. As noted above, depending on the circumstances and statutory findings, Section 338 permits additional tariffs of up to 50%—and in some cases, even the wholesale exclusion of designated products from the United States.

The composition of the Commission has changed substantially in recent months. Four of the five sitting commissioners—Chairman Brett Doyle and Commissioners Peter-Anthony Pappas, Bart Thanhauser, and David Foley, Jr.—joined the Commission between July and August 2026 following nominations by President Trump.

The fifth, Commissioner Jason Kearns, has served on the ITC since 2018 after being nominated by President Trump during his first term. A sixth commissioner appointed by President Trump, Samuel Negatu, has been confirmed but has not yet taken his seat at the Commission.

For companies and trade associations whose exports face foreign tariffs, regulatory barriers, discriminatory customs practices, market-access restrictions, or other differential treatment abroad, the proceeding offers both the opportunity to identify conduct that may warrant Commission attention and the opportunity to influence the procedures through which future Section 338 matters will be evaluated.

Other stakeholders, including importers and companies with global supply chains, may likewise have an interest in how the Commission defines the scope of actionable discrimination, what evidentiary standards it employs, what safeguards it provides for sensitive information, and what factors it considers when making recommendations that could ultimately result in significant additional duties or import restrictions.

NEXT STEPS

Importers, exporters, trade associations, and other stakeholders should consider taking the following steps before the November 8 deadline:

• Assess foreign trade barriers. Identify tariffs, regulations, customs practices, licensing requirements, technical restrictions, market-access barriers, or other measures imposed by foreign governments that may disadvantage US products or commerce relative to products or commerce from other countries.
• Evaluate potential Section 338 issues. Determine whether any identified measures could potentially implicate the statutory concepts of unreasonable or discriminatory treatment.
• Develop an evidentiary record. Gather documentation demonstrating the nature, scope, duration, and commercial impact of potentially discriminatory measures, including comparisons with treatment-afforded products from other countries.
• Consider confidentiality and retaliation risks. Evaluate whether information could expose the company, its employees, suppliers, customers, or foreign operations to commercial or governmental retaliation and address those concerns in any submission.
• Engage industry partners. Where a foreign measure broadly affects an industry, consider whether coordinated or complementary submissions could provide the ITC with a more complete factual record.
• Consider commenting on the ITC’s procedures—not just existing foreign barriers. Stakeholders can use the proceeding to address how the Commission should define key statutory terms, obtain and evaluate information, conduct investigations, protect confidential information, and communicate recommendations to the president.
• Prepare submissions well before the deadline. Comments must be received by 5:15 pm ET on November 8, 2026. The ITC has directed interested parties to submit comments through EDIS or by email to the Secretary to the Commission.

Given the US administration’s active use of multiple trade authorities, its recent invocation of Section 338 itself, and the Commission’s effort to establish a modern framework for fulfilling duties that have been largely dormant for decades, interested stakeholders should consider whether participating in this proceeding could help protect or advance their trade interests.

Morgan Lewis lawyers are available to discuss the Commission’s request for comments, the scope and potential application of Section 338, how the provision may affect particular industries or trade relationships, and the preparation and submission of comments to the Commission.