Section 338 Tariffs: How Canadian Exporters Should Prepare Before August 19

Published August 13, 2026

Key Points

• The U.S. announced a 50% tariff on a wide range of Canadian goods under Section 338 of the Tariff Act of 1930 on July 20, 2026, effective August 19, 2026.
• The tariff applies based on the entry date, not the shipment date, so goods must arrive and clear U.S. customs before 12:01 a.m. ET on August 19 to avoid the duty.
• CUSMA status does not exempt covered goods from this tariff.
• As reported in the Globe and Mail today (Aug. 12), Canada and the U.S. are in active talks, and there are legitimate reasons to expect a delay or partial resolution, but companies should still plan as if the deadline holds.
• Affected industries are flagging significant export exposure and are pressing Ottawa for a delay or a CUSMA carve-out.

O​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​n July 20, 2026, the U.S. proclaimed a 50% tariff on a broad set of Canadian goods under Section 338 of the Tariff Act of 1930. The tariff takes effect August 19, 2026, applies regardless of CUSMA eligibility, and is calculated based on the date goods enter the U.S., not the date they ship from Canada.

Why the Arrival Date Is What Matters

This is the detail most likely to catch shippers off guard. Canada typically assesses duty relief and tariff timing based on when goods ship. CBP does not work that way. CBP calculates duty based on the date a shipment is entered for consumption at the U.S. border, which in practice means the arrival date, not the date it left the Canadian facility or crossed into transit.

That means a shipment that leaves Canada on August 18 but arrives, or is entered, after 12:01 a.m. ET on August 19 will attract the 50% tariff. Exporters need to work backward from realistic arrival and entry timing, factoring in transit time, border congestion, and carrier schedules, rather than working forward from a planned ship date. Wherever possible, track and confirm arrival timing directly with your carrier and customs broker rather than assuming a shipment made “in time” based on when it left the dock.

Recommended Actions for Affected Exporters

• Confirm arrival, not shipment, timing on everything in transit or planned before August 19. Work with your carrier and broker to verify realistic entry dates, and build in a buffer, since border delays or transit slowdowns could push an otherwise timely shipment past the deadline.
• Move what you reasonably can out the door now, with entry confirmed before the deadline. If a shipment can realistically clear U.S. entry before August 19, prioritizing it avoids the added 50% cost.
• Hold or pause shipments where entry timing is uncertain. If a shipment’s arrival can’t be confidently confirmed before the deadline, it may be more cost-effective to delay it and reassess once there’s more clarity on whether the tariff proceeds, is delayed, or is narrowed.
• Don’t assume CUSMA protects you. These tariffs apply regardless of CUSMA-originating status, so origin certificates and preferential treatment won’t reduce or eliminate this particular duty.
• Coordinate directly with your customs broker on entry planning for the week of August 17. With the effective date falling mid-week, entry timing in those final days needs active coordination, not a standing shipping schedule.
• Stay ready to adjust on short notice. Tariff actions like this have shifted before, including changes to CUSMA’s own scope on short notice in the past. Companies should be prepared to act quickly in either direction, whether that means releasing paused shipments or holding steady, as negotiations develop.

State of Negotiations

As reported in the Globe and Mail today (Aug. 12), Canadian and U.S. officials are in active discussions covering steel and aluminum quotas, retaliatory tariffs, alcohol shelf access, provincial procurement rules, and dairy quota allocation, among other issues. Progress has reportedly been made, but the August recess in Washington is slowing the pace of talks, and a full resolution before August 19 is not guaranteed.

There are reasonable grounds to expect at least a delay to implementation while an interim agreement is finalized, since many of the underlying issues, including the Section 232 steel and aluminum tariffs, were close to a deal several months ago. A complete withdrawal of the tariffs is less likely, since the U.S. is expected to want to preserve this as negotiating leverage. Per the same Globe and Mail reporting, Canada’s chief trade negotiator has also cautioned that new tariffs taking effect on August 19 would risk stalling the broader talks with the U.S. Canada’s chief trade negotiator and the responsible minister are in Washington pressing these issues ahead of the deadline.

Some of the products covered are included in the broader Section 338 action primarily to add pressure on Canada to negotiate, rather than as a standalone U.S. priority, so the scope and intensity of the pressure can vary by sector even though the deadline and mechanics are the same across the board.

Tariff Impact

Affected industry associations have advised the federal government that the tariffs pose a serious risk to their sectors, citing significant export exposure and potential job losses, and have pushed for either preventing implementation entirely or securing a CUSMA-compliant exemption or delay. Industry groups continue to share technical and product data with the Department of Finance to support their positions and are monitoring developments on both sides of the border.

This update reflects the state of negotiations as of August 12, 2026. Given the pace of developments, importers should confirm current status with their customs broker before finalizing shipment plans for the week of August 17.

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.