Hello Customers, Colleagues, and Friends,
U.S. Customs and Border Protection (CBP) has issued implementation guidance regarding the new Section 338 additional tariffs on certain products of Canada. Following a temporary suspension from August 19 through August 22, the additional duties are now applicable to covered Canadian-origin goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on August 22, 2026.
Certain Canadian-origin products classified under the new Chapter 99 provisions 9903.03.12, 9903.03.13, and 9903.03.14 are subject to an additional 50% in addition to standard duties. The affected products span a wide range of HTS classifications, including certain alcoholic beverages, dairy products, consumer goods, industrial products, machinery, building materials, apparel, furniture, electronics, sporting goods, and other merchandise.
Importers should review the complete list of affected HTS classifications here: Section 338 – Canada HTS List
USMCA Does Not Exempt Covered Products
Importantly, USMCA eligibility does not provide an exemption from the Section 338 additional duty for products specifically covered by these provisions. Therefore, even if a Canadian-origin product qualifies for preferential treatment under USMCA, the additional 50% Section 338 duty still applies if its HTS classification is included on the applicable Section 338 product list. CBP also established Chapter 99 provisions 9903.03.15 and 9903.03.16, which carry a 0% additional ad valorem rate.
These provisions cover certain products identified in U.S. Note 51, including specified aluminum, steel and copper articles; certain vehicles and vehicle parts; wood products; semiconductor articles; patented pharmaceutical articles; and certain civil aircraft, engines, parts and components. The applicable HTS classification and Chapter 99 provision must still be properly reported at entry.
Other Duties Still Apply – Products covered by these Section 338 provisions remain subject to any other applicable: Normal HTS duties, Antidumping and countervailing duties, Section 301 duties, Section 232 duties, Other applicable taxes, fees, duties or charges. The new Section 338 treatment does not automatically replace or eliminate other applicable trade remedies.
What Importers Should Do Now
- Review the Section 338 HTS list immediately and determine whether any products they import are included.
- Do not assume that USMCA qualification exempts a covered product from the additional 50% duty.
- Verify HTS classifications, as applicability of these tariffs is classification-specific.
- Review landed-cost calculations and pricing for affected Canadian products.
- Review continuous bond sufficiency. A significant increase in duty liability can increase an importer’s required bond amount.
Krenz & Hannan International is actively monitoring CBP guidance, Federal Register notices, and CSMS messages related to these developments. We expect additional information to be released over the next 90-180 days as CBP develops implementation procedures.
Sincerely, Your friends at Krenz & Hannan International