U.S. Imposes Section 338 Tariffs on Certain Canadian Imports (CBP Guidance on Further Modifications)

Published July 20, 2026 | Updated Oct. 29 2026

Key Points

• CBP Guidance Available (Oct. 29): CBP issued guidance confirming that, effective October 30, certain Canadian products under 22 listed HTSUS classifications will no longer be subject to the 50% duty under HTSUS 9903.03.14. Also, 100 additional HTSUS classifications will become subject to the duty.
• Oct. 23 Proclamation: The U.S. further modified the scope of the 50% duties. Removed: plywood sheets, some paper products, certain machinery and refrigeration equipment, and certain packing crates and boxes. Added: certain valves, carpets, waste products, and others. Review ANNEX 1 and ANNEX 2, effective October 30, 2026. See the proclamation and White House fact sheet.
• Action needed now: Re-screen your Canadian HTSUS lines against the revised product lists before October 30, since goods previously out of scope may now be covered. Duty is based on entry date.
• Import exclusions (Sept. 29): On September 28, 2026, CBP issued new guidance on the exclusion of certain Canadian dairy products, alcoholic beverages, and motor vehicles from importation, effective September 29, 2026, at 12:01 a.m. Eastern Time. See the annexes: Motor Vehicles, Dairy, and Alcohol. Goods already imported but not yet entered for consumption, or withdrawn from warehouse, before September 29 remain subject to the 50% duty rather than the ban.
• Why the ban: On September 8, 2026, Canada imposed roughly $20 billion in new retaliatory tariffs on U.S. exports, including steel, dairy, and agricultural equipment, after breaking off trade talks the prior month. In response, the U.S. signed 3 proclamations banning certain Canadian motor vehicles, dairy products, and alcoholic beverages.
• First scope change (Sept. 15): Via 2 proclamations, the U.S. modified the motor vehicle and alcoholic beverage tariffs, removing items such as rock salt and cement and adding others, including all-terrain vehicles (ATVs) and additional dairy products.
• Original duties: Three Section 338 proclamations signed July 20, 2026 imposed a 50% duty on specific Canadian dairy, alcohol, and motor vehicle goods. The duty took effect August 22, 2026, following a 3-day suspension, and CBP issued implementation guidance on August 21 confirming the new HTSUS filing headings.
• No USMCA relief: USMCA origin does not exempt covered goods from the duty or the import exclusions, and both apply in addition to Section 232 tariffs.

O​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​n October 23, 2026, President Trump signed a further proclamation modifying the product scope of the 50% Section 338 duties on Canadian goods, effective October 30, 2026. According to the White House fact sheet, the action further refines the scope of the tariffs announced July 20 and modified September 8, by removing certain products and replacing them with others.

On October 29, 2026, U.S. Customs and Border Protection (CBP) issued a filing guidance for the October 30 changes. CBP also published an updated HTSUS list showing 100 additional classifications subject to the 50% duty and certain classifications no longer covered.

Jump to the section you want to review:

• Latest: Further Scope Modifications (CBP Guidance Available)
• Sept. 29 Import Exclusions
• Sept. 15 Scope Modifications
• Original 50% Duties (July 20)
• Tariff Changes Timeline
• What Importers Should Do
• Background on Section 338

Latest: Further Scope Modifications (CBP Guidance Available)

• Products removed: Plywood sheets, some paper products, certain machinery and refrigeration equipment, and certain packing crates and boxes come out of the scope of the 50% duty.
• Products added: Certain valves, carpets, waste products, and other goods replace them. Review ANNEX 1 and ANNEX 2.
• Effective date: October 30, 2026. Treatment turns on the entry date, so timing of entry for consumption or withdrawal from warehouse matters.
• USMCA and Section 232 stacking unchanged: The fact sheet states the tariffs apply to all covered goods regardless of USMCA origin, and in addition to Section 232 tariffs.
• Authority to keep adjusting: Section 338 authorizes the President to suspend, revoke, supplement, or amend any proclamation whenever the public interest requires. With two scope changes since July 20, importers should expect further movement.
• Administration framing: The fact sheet states that Canada walked away from a near-final trade deal this summer and imposed retaliatory tariffs on about $20 billion of U.S. exports, that Canada continues to retaliate rather than negotiate, and that only China and Canada have chosen to retaliate against U.S. tariffs rather than reach a deal. This is the administration’s characterization.

See the CBP guidance below.

CBP Guidance On Further Modifications

On October 29, 2026, U.S. Customs and Border Protection (CBP) issued CSMS #70314289 to provide filing instructions for the latest changes to the 50% Section 338 duties on certain Canadian goods. The changes apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time on October 30, 2026, under HTSUS heading 9903.03.14.

HTSUS classifications removed: Products of Canada classified under the following codes are no longer subject to the 50% additional duty under heading 9903.03.14:

• 1212.21.00
• 3920.20.00, 3923.10.90, and 3923.21.00
• 4412.33.06, 4412.33.26, 4412.33.32, and 4412.33.57
• 4412.34.26, 4412.34.32, and 4412.34.57
• 4811.51.20 and 4811.51.40
• 4819.10.00 and 4819.40.00
• 4823.70.00 and 4823.90.10
• 8418.69.01 and 8419.89.95
• 8422.30.91 and 8422.40.91
• 8433.60.00

Additional classifications covered: CBP confirmed that 100 additional HTSUS classifications are now subject to the 50% duty under heading 9903.03.14. These additions are shown in bold in the updated Section 338 Canada HTS list, which identifies all classifications subject to Section 338 duties as of October 30.

Other filing provisions:

• No changes were made to the classifications subject to headings 9903.03.12 and 9903.03.13, which continue to carry the 50% additional duty.
• Goods covered by headings 9903.03.12 through 9903.03.16 remain subject to applicable antidumping, countervailing, and other duties, taxes, fees, exactions, and charges.
• The existing Chapter 98 exceptions continue to apply, subject to specified exclusions and valuation rules for certain repairs, alterations, processing, and foreign assembly.
• Covered goods admitted to a U.S. Foreign Trade Zone generally must enter under privileged foreign status, unless eligible for domestic status.
• Additional duties under headings 9903.03.12 through 9903.03.14 remain eligible for drawback.

Importer action: Review the updated CBP HTSUS list against Canadian import classifications and verify the applicable Chapter 99 reporting requirements for entries on or after October 30.

Import Exclusions Effective Sept. 29

Proclamations (Sept. 8)

On September 8, 2026, President Trump signed five Section 338 proclamations in response to what the administration described as continued Canadian discrimination against U.S. commerce. Per the White House fact sheet, the administration’s position is that Canada broke off trade talks in August and, on September 8, imposed roughly $20 billion in new retaliatory tariffs on U.S. exports covering steel, dairy, and agricultural equipment.

Three of those proclamations exclude certain Canadian motor vehicles, dairy products, and alcoholic beverages from importation, effective September 29, 2026, at 12:01 a.m. Eastern Time. The other two modified the duty scope (see the Sept. 15 section below).

• Dairy: The administration found Canada maintained its dairy TRQ practices even after the 50% duty took effect. Dairy products already imported but not yet entered for consumption, or withdrawn from warehouse, before September 29 remain subject to the 50% duty.
• Alcoholic beverages: The administration cited a further escalation in Canada’s alcohol restrictions, with the same transition rule for goods already in transit.
• Motor vehicles: The administration found Canada’s motor vehicle tariff scheme remained in place, with the same transition rule for goods already in transit.

CBP Guidance (CSMS # 70050970)

Per CBP Guidance (CSMS # 70050970), effective September 29, 2026, at 12:01 a.m. Eastern Time, certain Canadian products identified in the annexes to Presidential Proclamations 11061, 11062, and 11063 are excluded from importation into the U.S. See the annexes: Motor Vehicles, Dairy, and Alcohol.

Covered headings: Certain products under HTSUS headings 0404, 1702, 1703, 2202, 2203, 2204, 2205, 2206, 2207, 2208, and 8711, as listed in the annexes.

Excluded products cannot be:

• Admitted to a Foreign Trade Zone
• Entered into a bonded warehouse
• Transported in-bond
• Entered for consumption

CBP will unconditionally reject and deny entry to covered products as of the effective time. ACE entries containing covered products that have not been released will be cancelled.

Transition rule: Products imported before 12:01 a.m. on September 29 can still be entered for consumption. Products admitted to a bonded warehouse or FTZ before that time can be withdrawn for consumption. Both are subject to the 50% ad valorem duty under Proclamations 11046, 11047, and 11048.

Alcoholic beverages: The exclusion applies only when the merchandise meets an applicable scope limitation in the Alcohol Annex. Where the limitation states “Packaged,” it applies only to products in bottles, cans, boxes, kegs, or similar direct-to-consumption containers. Alcoholic beverages outside an applicable scope limitation are not excluded and remain subject to the 50% duty under Proclamation 11046.

ACE filing updates: CBP updated ACE Cargo Release, e214 FTZ admissions, and ACE Entry Summary Update/Create messaging on September 29, 2026, at 12:01 a.m. Noncompliant entries receive system rejects:

• 239: HTS NOT ALLOWED FOR COUNTRY OF ORIGIN (e214 FTZ admission)
• 335: HTS NOT ALLOWED FOR COUNTRY OF ORIGIN (Cargo Release)
• 886: HTS PROHIBITED FOR CO (ACE Entry Summary Update/Create)

For Section 338 entry filing questions, contact the Office of Trade at TradeRemedy@cbp.dhs.gov. For entry summary errors, contact your CBP client representative or the ACE Help Desk.

First Scope Modifications Effective Sept. 15

Two of the September 8 proclamations modified the scope of the July 20 motor vehicle and alcoholic beverage tariffs, effective September 15, 2026, removing products such as rock salt and cement and adding others, ranging from ATVs to additional dairy products.

CBP Guidance

CBP guidance applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on September 15, 2026, under HTSUS headings 9903.03.12 and 9903.03.14:

• 122 classifications added. The attached HTS list gives the complete set of classifications subject to Section 338 duties as of September 15, with the 122 additions under 9903.03.12 or 9903.03.14 shown in bold. No changes to 9903.03.13.
• Certain classifications removed. Two classifications (2208.30.60 and 2208.70.00) removed from 9903.03.12, and eight, including rock salt (2501.00.00), cement (2523.29.00), and fishing rods (9507.10.00), removed from 9903.03.14.
• 0% carve-out narrowed. Only goods under 9903.03.13 can still claim the 0% rate under 9903.03.15. Goods under 9903.03.12 or 9903.03.14 can no longer claim it.
• Chapter 98 treatment. The additional duty under 9903.03.12 to 9903.03.14 does not apply to goods properly entered under a Chapter 98 provision, except subchapter XXIII and subheadings 9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80. For those exceptions, the duty applies only to the value of the repairs, alterations, processing, or foreign assembly, not the full entered value.
• FTZ. Covered goods must generally be admitted under “privileged foreign status” (19 C.F.R. 146.41) unless eligible for “domestic status” (19 C.F.R. 146.43), and are assessed duty at entry for consumption based on the applicable classification.
• Drawback is available on duties under 9903.03.12 through 9903.03.14.

Importers and brokers with alcoholic beverage or motor vehicle exposure should cross-check classifications against the attached HTS list before filing, since coverage changed in both directions.

Original 50% Duties Effective Aug. 22

On July 20, 2026, President Trump signed three proclamations under Section 338 of the Tariff Act of 1930, imposing an additional 50% ad valorem duty on specific Canadian goods in the dairy, alcoholic beverage, and motor vehicle sectors. Per the White House Fact Sheet, the tariffs respond to what the administration identifies as discriminatory treatment of U.S. products by Canada.

Sectors Targeted

1. Dairy. The finding centers on Canada’s TRQ system for cheese. Canada allows EU retailers to access its CETA cheese TRQ but excludes retailers from the equivalent USMCA cheese TRQ, which the proclamation says disadvantages U.S. cheese exporters relative to European counterparts. Proclamation. Since updated: additional dairy products added to the duty (Sept. 15), and certain dairy products excluded from importation (Sept. 29).

2. Alcoholic beverages. Since March 2025, Canadian provinces and territories have restricted or halted the purchase, distribution, and retailing of U.S. alcohol. Ontario’s LCBO and Quebec’s SAQ pulled U.S. products that month, and only Alberta and Saskatchewan reversed course, in June 2025. The proclamation cites an 81% drop in U.S. alcohol exports to Canada (from roughly $718 million to $137 million, March 2025 through February 2026 versus the prior year), while imports from Chile, Japan, Argentina, Ireland, New Zealand, and Australia rose. Proclamation. Since updated: duty scope revised (Sept. 15), and certain alcoholic beverages excluded from importation (Sept. 29).

3. Motor vehicles. Since April 2025, Canada has applied a 25% tariff on U.S. vehicles that don’t qualify for USMCA treatment, and 25% on non-originating content for those that do, along with automaker-specific TRQs. The proclamation states Canada reduced these quotas for companies that shifted production out of Canada. U.S. vehicle exports to Canada fell about 22% (from about $25.9 billion to $20.3 billion), while imports from Mexico, Japan, Korea, and Germany increased. Proclamation. Since updated: duty scope modified (Sept. 15) and further modified (Oct. 30), and certain motor vehicle products excluded from importation (Sept. 29).

U.S.-Canada Trade Tensions Escalate (Aug. 25)

On August 25, 2026, the White House accused Canada of unfairly restricting U.S. commerce and choosing retaliation over negotiations, pointing to Canada’s 25% tariffs and quotas on U.S. vehicles, restrictions on U.S. alcohol, and restrictive dairy TRQs. It also criticized Canada’s latest $27.6 billion in counter-tariffs on U.S. goods, including 50% tariffs on certain steel and aluminum products and 25% tariffs on fish and tools. President Trump called Canada “the most difficult and unreasonable” trading partner. Read the full White House statement.

CBP Guidance (CSMS # 69606660)

On August 21, 2026, CBP issued implementation guidance (CSMS # 69606660) confirming filing instructions following the suspension:

• Effective date: Goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on August 22, 2026.
• Chapter 99 headings: Entries must use HTSUS 9903.03.12 through 9903.03.16. See the Section 338-Canada HTS List.
  • 9903.03.12 to 9903.03.14: 50% additional duty on the dairy, alcohol, and motor vehicle goods.
  • 9903.03.15 and 9903.03.16: 0% additional rate for excluded categories, including steel, aluminum, and copper derivative articles, certain passenger and commercial vehicles and parts, wood products, semiconductors, patented pharmaceuticals, and civil aircraft and components.
• Stacking: Covered goods remain subject to any antidumping, countervailing, or other applicable duties, taxes, fees, and charges.
• Chapter 98 and FTZ: Sets out Chapter 98 interaction and confirms FTZ admission under “privileged foreign status.”
• Drawback is available.
• Entry summary sequencing: Specifies reporting order for Chapter 98 and 99 numbers alongside Section 301, 122, 232, and 201 provisions.

Section 338 Tariff Changes at a Glance

• Rate: Additional 50% ad valorem, on top of existing duties, taxes, fees, and charges.
• USMCA does not provide relief. Tariffs and exclusions apply regardless of USMCA qualification.
• Three proclamations, three product lists. Each has its own Annex I (exceptions and implementation details) and Annex II (HTSUS classifications and Chapter 99 modifications). Products range from wine to hockey sticks, so don’t assume you’re unaffected just because you don’t ship dairy, alcohol, or vehicles.
• Exemptions: Energy products, potash, goods already subject to Section 232, aircraft under the WTO Agreement on Trade in Civil Aircraft, and certain other goods such as fish and critical minerals.
• FTZ: Covered goods admitted on or after the effective date must be under “privileged foreign status,” locking in the rate at admission rather than withdrawal.

Recommended Actions for Importers

1. Re-screen every Canadian import against current scope. Check all three proclamations, the September 29 import exclusions, and both scope changes. Goods added October 30 (such as certain valves, carpets, and waste products) become subject to the 50% duty, and goods removed (such as plywood sheets and certain machinery) drop out. See the proclamation and fact sheet. Don’t rely on general product descriptions. Work through the actual HTSUS provisions and Chapter 99 instructions in ANNEX 1 and ANNEX 2 of the October 23 proclamation, the original Annex I and Annex II, and the 9903.03.12 to 9903.03.16 headings in CBP’s guidance.

2. Model your landed-cost exposure and flag banned goods. Layer the 50% duty on top of every other duty and fee for covered merchandise, and separately flag goods subject to the September 29 import exclusions rather than the duty.

3. Don’t count on USMCA. Covered goods remain subject to the duty and the exclusions even when they qualify for USMCA preferential treatment.

4. Revisit classification and origin with your broker. Confirm classifications, bills of materials, and country-of-origin determinations are current and documented, particularly for goods near the boundary of a covered provision, the 9903.03.15 and .16 carve-outs, or the September 15 and October 30 scope changes.

5. Check who’s on the hook. Review purchase orders, supply agreements, Incoterms, and tariff pass-through or price-adjustment clauses to see whether you or your supplier absorbs the duty, or whether an exclusion makes the shipment unworkable.

6. Get ahead on customs planning. Talk through bonded warehouse and FTZ strategy, entry timing, and sourcing alternatives with your compliance team. Newly added goods are assessed by entry date, so timing entries around October 30 matters, and excluded products are barred from FTZ admission, bonded warehouse entry, and in-bond movement.

Refer to: Section 338 Tariffs: How Canadian Exporters Should Prepare Before August 22

Section 338 Background

This is a different legal mechanism than the Section 232 national security tariffs already in place on steel, aluminum, copper, and autos, and it’s also separate from the retaliatory tariffs Canada and the U.S. have exchanged since 2025. Section 338 lets the President impose duties of up to 50% when a trading partner is found to discriminate against U.S. commerce relative to how it treats other countries, and, if the discrimination continues, to exclude the foreign country’s products from importation altogether. This is the first major use of that authority in the current tariff cycle, and it matters because the legal basis, product scope, and exclusions are all different from what importers have dealt with under Section 232 or the earlier IEEPA actions.

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