Major Federal movement on active and pending restrictions on small business, seafood purchases, Canadian products

Federal and Congressional mandates affecting commissary, exchange, and dining facility procurement

ALA member company compliance confusion and concerns as ALA seeks definitive guidance from government for suppliers

China seafood restrictions

As ALA has been reporting, the China restrictions break down into two successive years of active and pending legislation and federal rulemaking.

New restrictions being considered in the FY 2027 defense policy bill. The FY 2027 bill contains a provision that would bar the Secretary of War from procuring seafood that originates or is processed in China for use in military dining facilities, including galleys aboard U.S. naval vessels. In parallel, the provision would prohibit the sale of raw or processed Chinese-origin seafood at military commissary stores. (House-passed NDAA, Sec. 644)

Existing restrictions in the FY 2026 defense bill. But suppliers are struggling to comply with the existing law set forth and enacted in the FY 2026 defense policy bill (or NDAA).

Section 831 of the FY 2026 NDAA directs the Department of Defense (DoD) to narrow the commissary-resale exception under 10 U.S.C. 4862/4757-style food provisions, specifically prohibiting the procurement of seafood originating from covered adversarial countries (China, Russia, Iran, and North Korea). The DoD published a proposed rule in the Federal Register (accessible via Federal Register DFARS Updates) to amend DFARS Part 225, removing the commissary resale exception for seafood from these covered nations, subject to narrow undue-burden waivers.

ALA has learned that DeCA is polling suppliers on their seafood sourcing and that DoD is formalizing these exact NDAA restrictions into official federal procurement regulations.

When Section 831 of the FY 2026 NDAA was passed into permanent defense code (10 U.S.C. § 4862), Congress left a major loophole: the standard Berry Amendment waiver system.

Under existing procurement rules, DoD can bypass domestic sourcing laws if U.S. suppliers cannot fulfill an order or if American seafood is deemed cost prohibitive. Because of this, the Pentagon can effectively grant rolling, temporary waivers to continue buying foreign seafood for military bases.

Lawmakers are pushing new legislation for several specific reasons:

Eliminating the Loophole: The FY 2027 defense bill explicitly states that Berry Amendment exemptions “shall not apply to the procurement of any fish, shellfish, or seafood product.” This strips away DoD’s ability to issue temporary waivers.
Targeting Third-Party Processing: The initial law restricted where seafood originated. The new provisions expand this to ban seafood caught anywhere globally but sent to China for cheap processing.
Fixing the “Small Purchase” Exception: The Pentagon’s current DFARS regulations still permit the acquisition of adversarial seafood for commissaries under a “small purchase” exception for orders below certain dollar thresholds. Congress wants a total, zero-exception embargo.

ALA will disseminate any definitive guidance emanating from the proposed rule, GSA, or DeCA.

Companies scrambling to unscramble Canada tariffs

President Trump has placed tariffs on Canadian goods.

An Executive Order and White House Fact Sheet announced the tariffs.

The sweeping 50% tariffs will have a major effect on commissaries and exchanges.

And upcoming directives to block Canadian goods from federal contracts will have another direct effect on military commissaries and dining facilities.

Definitive guidance is expected from several government sources, including the U.S. Trade Representative and the GSA. ALA is also tracking guidance that may emanate from the Department of War.

The trade restrictions specifically target broad sectors of consumer goods that are staples in military retail:

Alcohol, Wine, and Spirits: President Trump signed an executive order entirely banning the importation of various Canadian whiskies, beers, and wines starting late September 2026. This will force exchange Class Six stores to completely pull those items from their inventory.
Dairy, Whey, and Nutritional Products: With the absolute ban on Canadian whey products and certain dairy imports, sports nutrition supplements, protein powders, and specialty cheeses frequently sold at exchanges will face rapid inventory shortages.
Consumer Goods and Apparel: Items hit with the 50% tariffs—such as apparel, jewelry, furniture, and hockey/sports gear—will see significant price inflation on exchange shelves if suppliers cannot find non-Canadian alternatives.

Federal Procurement Ban

President Trump’s directive to the General Services Administration to strip Canadian-origin products from the Multiple Award Schedules primarily targets long-term, large-scale government procurement contracts.

While it appears this order does not entirely block an exchange from buying a commercial item via standard retail supply chains, it prohibits the purchase of Canadian equipment and services used to run the stores themselves—such as logistics software, warehouse electronics, or facility maintenance equipment sourced through federal procurement schedules.

Ultimately, military retail officials are actively tracking these policies to minimize costs. Troops and their families should expect to see selective product shortages or removals (especially in the alcohol and supplement aisles) and price adjustments as on-base retailers and exchanges adapt to the shifting trade restrictions.

Where is the specific list of products affected?

Following the collapse of trade talks and Canada’s implementation of retaliatory tariffs, President Trump signed five new Proclamations under Section 338 of the Tariff Act of 1930. These documents span an 18-page Harmonized Tariff Schedule list identifying roughly 440 imported product categories hit with either total bans or 50% duties.

The targeted goods are organized into two primary lists:

The Absolute Import Ban List (Effective September 29, 2026)

Rather than just applying tariffs, these product categories are completely excluded from importation into the United States:

Alcoholic Beverages: Most Canadian-made retail alcohol, including malt beer, cider, sparkling wine, vermouth, rye, vodka, and other spirits. (Note: Bulk whiskey or liqueur in containers larger than four liters is currently exempt)
Specific Dairy & Sugars: Whey protein concentrates, milk/whey protein powders, invert molasses, and cane molasses.
Non-Alcoholic Beer: Specifically called out and banned alongside regular alcohol.
Motorcycles: Larger-capacity motorcycles (with a cylinder capacity over 800 cubic centimeters) and mopeds.

The 50% Tariff List

The list covers hundreds of consumer and tech products that face a steep 50% import tax:

Electronics & Tech: Smartphones and video game consoles.
Household Goods & Furniture: Vacuum cleaners, plastic kitchenware, furniture made with bamboo, mattresses, paper products (such as napkins), and lighting equipment.
Sports & Recreational Gear: Ice skates, golf carts, and swimming pools.
Apparel & Jewelry: Gold necklaces, silver jewelry, and wool clothing.
Dairy Expansion: Cheese and cheese substitutes (such as Cheddar, Mozzarella, Swiss, Gouda, and Havarti) are not banned but are hit with the 50% tariff rate.
Metals & Materials: Certain iron, steel, and aluminum products. [1, 2]

Official guidance is being prepared and will be issued to federal agencies via the General Services Administration (GSA) and the Office of the U.S. Trade Representative (USTR).

What the GSA Guidance Will Cover

The GSA and USTR are establishing the regulatory mechanism to execute the purge of Canadian goods from the Multiple Award Schedules (MAS), a system representing roughly $50 billion in annual government contract spending: [1, 2, 3]

Contract Modifications and De-listings: GSA will issue instructions to contracting officers to systematically identify and strip Canadian-origin products from existing MAS catalog schedules. [1, 2]
Compliance Checks for Vendors: Private contractors holding GSA schedules will receive formal updates requiring them to audit their inventory country-of-origin listings. Vendors will be forced to swap out Canadian components or face removal from the federal marketplace.
Trade Agreement Waivers (FAR Rules): Because GSA schedules are typically bound by international treaties—including the World Trade Organization’s Government Procurement Agreement (GPA) and standard Federal Acquisition Regulation (FAR) clause 52.225-5—the upcoming guidance will detail how the administration intends to legally bypass or suspend these reciprocity provisions for Canada.

Federal agencies can expect the formal GSA procurement notices to be published in the coming weeks as the wider import bans take effect on September 29.

Major expansion of small business contracting eligibility

The U.S. Small Business Administration (SBA) has proposed a comprehensive rule on small business size standards methodology. Rather than merely modifying existing thresholds, as it is required to do every five years, SBA proposes to replace the methodology used to determine which businesses are “small.” SBA’s rule would replace nearly 1,000 industry size standards with 338 consolidated standards at higher industry classification tiers.

It would eliminate all 18 subindustry exceptions, such as the IT Value Added Reseller (ITVAR) exception to the North American Industry Classification System (NAICS) code 541519 and the Environmental Remediation Services exception to NAICS code 56291. It would also make employee count, not revenue, the default measure wherever SBA believes the Small Business Act (the Act) permits. Thus, SBA estimates a net increase of approximately 114,541 small businesses, including 37,002 firms that held more than 105,000 federal contracts worth approximately $71 billion in fiscal year 2025. In some industries, the proposed employee limits are high enough that multibillion-dollar public companies could qualify as “small businesses.” Contractors should compare current and proposed standards using affiliated receipts and employee data, identify newly eligible competitors, assess set-aside portfolios and agency goaling, and evaluate planned transactions and recertification events, all of which may be impacted by this proposed rule.

Simplified Categories: Reduces nearly 1,000 industry-specific size standards down to 338 broader definitions based on consolidated North American Industry Classification System (NAICS) tiers.

Higher Thresholds: Significantly increases revenue and employee caps across multiple sectors (for example, raising computer programming receipt limits from $34 million to $531 million) to account for inflation and economic shifts.

Expanded Eligibility: Adds an estimated 114,500 companies to the pool of businesses qualified for federal contracts and loans.

Elimination of Exceptions: Removes all 18 sub-industry exceptions, replacing them with the higher baseline standards.