President Trump Directs Removal of Canadian Products from Federal Procurement

Client AlertOn September 16, 2026, President Trump issued a presidential memorandum titled “Restoring Reciprocity in Government Procurement”, directing the Director of the Office of Management and Budget and the United States Trade Representative, in coordination with the Federal Acquisition Regulatory Council, to identify and take legally permitted steps to remove or restrict Canadian-origin items across the federal civil procurement system.
This alert reviews the background and legal framework and outlines the key implementation questions contractors should be tracking.
Extension of U.S.-Canada Trade Dispute to Federal Procurement
Tensions in the U.S.-Canada federal procurement relationship first surfaced on the international stage at the March 2026 meeting of the World Trade Organization (WTO) Committee on Government Procurement. The United States—echoed by the European Union, Japan, New Zealand, Norway, Switzerland and the United Kingdom—raised concerns that Canada’s new policy of granting preferences for Canadian goods, services and suppliers in its federal government procurements and not providing U.S. and other parties’ goods, services and suppliers similar treatment was inconsistent with Canada’s commitments under the WTO Government Procurement Agreement (WTO GPA). These concerns were reiterated at the June 2026 Committee meeting, where eight GPA parties expressed similar views.
The WTO GPA commits its parties to open government procurement above certain thresholds to suppliers from other WTO GPA parties on a non-discriminatory basis. For covered procurements, its cornerstone principles of non-discrimination and transparency require parties to treat other GPA parties’ goods, services and suppliers no less favorably than domestic goods, services and suppliers.
For its part, the United States implements its WTO GPA obligations through the Trade Agreements Act (TAA), 19 U.S.C. § 2501 et seq., and related FAR and DFARS clauses. The U.S. Trade Representative (USTR) designates countries whose products are eligible for non-discriminatory treatment, including WTO GPA countries. Above certain WTO GPA thresholds, the TAA displaces the generally applicable Buy American Act (BAA), under which a 20-30% price penalty applies to non-U.S. products in federal civilian acquisitions. When the TAA applies, products from USTR-designated countries are treated as domestic end products, without a price penalty or domestic preference. Unless an exception applies, products from non-designated countries are barred entirely from TAA-covered procurements, not merely subject to a price penalty. As a WTO GPA designated country, Canadian end products are treated equivalently to U.S. products in covered procurements.
Canada addressed the concerns raised at the WTO Committee meeting by noting that its Buy Canadian policies seek to respond to exceptional challenges in global trade while continuing to provide GPA suppliers with access to Canadian federal procurement opportunities. Canada indicated it would continue to reflect on the concerns raised and engage further with its GPA partners. Notably, Canada’s justification about global trade challenges and continued access does not explain how preferences for Canadian goods and suppliers would be consistent with the GPA’s requirements for equal treatment. Nor has Canada publicly explained how its policies are distinguishable from policies like the BAA preferences under U.S. procurement law, which the U.S. government waives for covered procurements pursuant to its obligations under the WTO GPA.
On September 8, 2026, President Trump signed five proclamations that excluded certain Canadian products from importation and modified tariffs previously imposed on other Canadian products under Section 338 of the Tariff Act of 1930, including alcohol, dairy and certain motor vehicles. On the same day, via a Truth Social post, the President directed GSA, in conjunction with the USTR, to remove Canadian-origin products from the GSA Multiple Award Schedules. The White House also released a fact sheet, “President Donald J. Trump Responds to Canada’s Retaliation,” explaining that the basis for the actions was to counter Canada’s retaliatory tariffs on about $20 billion of U.S. exports, including steel, dairy and agricultural equipment. The White House fact sheet further characterized President Trump’s directive as an effort to defend the American workers, offsetting the burden and disadvantage on U.S. commerce from Canada’s discriminatory treatment on U.S. exports.
September 16 Presidential Memorandum
The September 16 Presidential Memorandum significantly extends the September 8 directive by directing the removal of Canadian-origin items not just from the GSA schedules, but from the entire federal civil procurement system. Importantly, the Memorandum does not itself effectuate the removal—Canadian-origin items remain eligible for federal government contracts until further implementation action is taken. The Memorandum directs the OMB Director and USTR, in coordination with the FAR Council, to identify and take all steps permitted by applicable law to remove or restrict Canadian-origin items and to notify agencies of domestic alternatives. The Memorandum also directs USTR to monitor Canada’s treatment of U.S.-origin items and to inform the President of circumstances that might warrant restoring Canadian-origin items’ availability, such as a change in Canadian policy. Each agency head is authorized and instructed to take appropriate implementing measures.
Notably, the scope of the removal is expressly limited to the federal civil procurement system and accordingly does not extend to Department of War (DoW) procurements. This distinction may reflect the Reciprocal Defense Procurement Memorandum of Understanding (MOU) between the U.S. Department of War and the Canadian Department of National Defence. Under that MOU, the countries are generally required to evaluate defense supply offers without applying domestic preferences. These defense-specific arrangements, which operate separately from the WTO GPA and TAA framework, may explain why the Memorandum was limited to civilian procurement.
Implementation and Open Questions
The Memorandum does not specify how the OMB Director and USTR should remove Canadian products from the civil procurement system. The most obvious implementation mechanism is modifying Canada’s status under the TAA. The USTR could remove Canada from the designated country list, with the effect that Canadian-origin products would no longer qualify for equal treatment with domestic products and would be barred entirely from procurements above the TAA thresholds, absent some exception. The new designated country list would be incorporated into new contracts, but existing contracts would require a modification.
That said, the U.S. government may avoid procurement disruption by effectuating the change only on a forward-looking basis—removing Canada as a designated country for future solicitations and contract awards and removing Canadian products from the GSA catalogue so they cannot be ordered. Notably, three days after the President’s Truth Social directive, GSA MAS Refresh 33, originally planned for September 2026, was rescheduled to October “to ensure updates are fully and appropriately integrated ahead of release.” The refresh could serve as an early vehicle for implementing restrictions on Canadian-origin items on the schedules.
How the relevant U.S. government authorities will implement the Memorandum and the scope of product removal remains unclear. The Memorandum applies only to Canadian-origin items that “can, where warranted, be removed” and directs officials to take only steps “permitted by applicable law.” Whether the contemplated steps are consistent with U.S. obligations under the WTO GPA is an open question. The Trump administration could invoke the GPA’s essential-security exception, but that exception is tied to procurement of war materials and procurement indispensable for national security or defense—and would sit uneasily with a measure expressly limited to civil procurement and premised on reciprocity. Even if Canada’s policies are inconsistent with its obligations, the GPA does not authorize unilateral self-help remedies. Article XX channels disputes to the WTO Dispute Settlement Understanding, and the agreement contains no mechanism for a party to withdraw another party’s market access as an independent countermeasure for perceived non-compliance. Accordingly, while the Buy Canadian policies may raise serious concerns under the GPA’s non-discrimination requirements—concerns shared by multiple GPA parties—they do not provide a clear legal basis under the agreement for the United States to restrict Canadian access to the U.S. federal procurement system outside the formal dispute resolution process.
Moreover, the Memorandum instructs USTR to monitor Canada’s treatment of U.S.-origin items and to inform the President of any circumstances that might warrant restoring Canadian-origin items’ availability, such as a change in Canadian policy. This suggests the restrictions, even once implemented, may be leveraged as part of ongoing negotiations rather than as a permanent structural change.
Action Items for Federal Contractors
Government contractors with Canadian supply chains or Canadian-origin products in their offerings should closely monitor implementation of the Memorandum and the GSA Schedule directive. Key action items include:

Track GSA MAS Refresh 33. Refresh 33 is currently scheduled for October 2026. Contractors with Canadian-origin products on GSA schedules should closely track the release of Refresh 33 for changes to TAA country-of-origin requirements or other restrictions affecting Canadian-origin items and be prepared for ensuing changes to their offerings. Contractors without GSA schedule contracts can similarly look to Refresh 33 as an early indicator of how aggressively the U.S. government is pursuing the removal of Canadian products.
Monitor Agency Guidance. Contractors should watch for implementing guidance, or proposed rules, from OMB, USTR, GSA, the FAR Council and any agencies with which they hold government contracts regarding specific steps being taken to remove or restrict Canadian-origin items. The Memorandum is broadly worded, and its practical effect will depend significantly on the implementing actions taken by these agencies. To the extent implementation proceeds through rulemaking, companies may also have an opportunity to comment through the notice-and-comment process.
Review Supply Chains. Even though no exclusion is yet in effect, contractors should review GSA Schedule offerings as well as other TAA-covered federal contracts, open orders and pending proposals for Canadian products. Contractors should assess their exposure by confirming that the relevant products are end products of Canada, under the substantial transformation test, and evaluating whether substitute products from the United States or other designated countries are available (or the cost at which they could be substituted).
Review contract-change mechanisms. Contractors should review contract terms addressing product substitutions, contract modifications, economic price adjustments and deletion of products from contract catalogues, to understand how they might remove Canadian products from their contracts as needed.
Separate customs and procurement analyses. The recent executive direction targeting Canada addresses both the importation and tariff treatment of certain Canadian products as well as the eligibility of Canadian-origin items for purchase within the federal civilian procurement system. A product’s treatment under the customs regime presents a distinct issue from its eligibility for purchase under a federal contract.

Akin’s Government Contracts and Trade Policy teams are closely monitoring developments related to the September 16 Memorandum. If you have questions about how these changes may affect your government contracts, supply chains or the Section 338 tariffs on Canada, please contact the authors of this alert or your regular Akin contact.