What changed The 50% Section 338 additional duty on specified Canadian-origin goods — briefly suspended on Aug 18 — took effect as scheduled. After weeks of negotiation, talks between Canada and the United States broke down late in the evening of August 21, and the additional 50% tariff under Section 338 officially took effect at 12:01 a.m. ET on August 22, 2026. Prime Minister Mark Carney announced Canada suspended trade negotiations and confirmed Canada intends to respond with matching, dollar-for-dollar tariffs.
CBP issued implementation guidance on August 21, 2026 (CSMS #69606660), confirming the August 22 effective date and the new HTSUS headings importers must use to file. A temporary-suspension proclamation was published in the Federal Register on Aug 24.
Who's affected Importers of Canadian-origin goods across three proclamation annexes (dairy, alcohol, motor vehicles). Coverage extends beyond the headline sectors, including products like wine, hockey sticks, and cement.
Scroll down to Annex II of each proclamation and the list broadens fast: wine, hockey sticks, cement, plywood, furniture, fishing rods, seeds, clothing, wigs, swimming pools.
Energy, potash, Section 232 goods, and a few other categories are excluded. Direct importers, FTZ operators, and cross-border e-commerce sellers are all exposed.
Cost impact
An additional 50% ad valorem duty applies on top of any existing duties, taxes, fees, and charges.
It stacks on the product's ordinary duty rate, on the Section 301 forced-labor tariff (10%) where that applies, and on any antidumping duty.
USMCA does not provide relief — these tariffs apply regardless of whether a good qualifies for preferential treatment under USMCA. Per-unit impact depends on customs value and your specific HTS classification.
What to do 1. Pull your Canadian-origin entries and confirm which fall under any of the three annexes / U.S. Note 51. 2. File affected entries using the new Chapter 99 headings: entries must use HTSUS headings 9903.03.12 through 9903.03.16, corresponding to the dairy, alcohol, and motor vehicle provisions plus two carve-out categories.
3. Re-quote landed cost on affected Canadian SKUs to add the 50% layer. 4. Note the timing rule: CBP calculates duty based on the date a shipment is entered for consumption — in practice the arrival date, not the date it left the Canadian facility.
5. If duties were assessed during the Aug 19–22 suspension window, refunds will be processed by CBP pursuant to applicable law and standard procedures — flag those entries for your broker. 6. Monitor for Canadian retaliatory tariffs and any further HTSUS modifications published in the Federal Register.
Effective dates - 50% Section 338 duty in effect → Aug 22, 2026, 12:01 a.m. ET - CBP implementation guidance (CSMS #69606660) issued → Aug 21, 2026 - FR temporary-suspension notice published → Aug 24, 2026 - Refund window for duties assessed → Aug 19–22, 2026 entries
Sources - https://content.govdelivery.com/accounts/USDHSCBP/bulletins/4261d04 (CSMS #69606660) - https://www.federalregister.gov/documents/2026/08/24/2026-17294/temporary-suspension-of-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of - https://www.ghy.com/trade-compliance/us-imposes-50-section-338-tariffs-on-canadian-imports-dairy-alcoholic-beverages-and-motor-vehicles/ - https://www.troutman.com/insights/three-day-suspension-of-section-338-additional-duties-on-canadian-imports/ - https://www.chrobinson.com/en-us/resources/insights-and-advisories/client-advisories/2026q3/08-22-26-client-advisory-new-50-percent-section-338-duties-on-select-canadian-products/ - https://www.netparcel.com/new-us-tariff-on-canada-2026-50-duty-takes-effect-august-19/
---
GIL Trade & Tariff Desk — dated, plain-English alerts on the trade rules that cost you money: what changed, who's affected, what it costs, what to do. Free while we build the archive — get every alert in your inbox the day it lands.
This alert is informational only and is not legal, customs, or trade-compliance advice. Verify current rates and rules against the linked primary sources or with a licensed customs broker before acting. Corrections: errors are corrected in-place with a dated note.