U.S. Customs and Border Protection (CBP) has issued guidance regarding the implementation of Section 338 additional duties on certain goods from Canada pursuant to Presidential Proclamations 11046, 11047, and 11048. These measures were enacted to address Canadian actions considered discriminatory toward U.S. commerce involving alcoholic beverages, dairy products, and motor vehicles.
On August 18, 2026, Presidential Proclamation 11056 temporarily suspended the additional 50% duties on affected Canadian goods through August 21, 2026. The suspension expired at 12:01 a.m. EDT on August 22, 2026, when negotiations between the two countries failed.
Applicability
Beginning August 22, 2026, a vast list of Canadian made products are now subject to 50% ad valorem duty, regardless of USMCA status. The three lists of Canadian products can be found as an attachment at the bottom of CBP’s CSMS instruction at CSMS # 69606660 – GUIDANCE: Section 338 Additional Duties on Certain Goods of Canada. The Section 338 tariff on these items will be assessed using newly formed HTS 9903.03.12, 9903.03.13, and 9903.03.14.
Exemptions
The following Canadian-origin products remain exempt from the Section 338 duty under 9903.03.15, when subject to existing Section 232 tariff orders:
Canadian civil aircraft and related engines, parts, components, subassemblies, and flight simulators also remain exempt from the additional duty under 9903.03.16.
Chapter 98 Considerations
Imports properly entered under Chapter 98 provisions, such as temporary import bonds, are exempt from Section 338 duties. However, important exceptions apply and the new tariff applies to items, including those returned to the United States after repairs or alterations:
For these 9802 provisions, the additional duty applies only to the foreign repair, alteration, processing, or assembly value.
Products subject to the Section 338 duties that are admitted into a U.S. Foreign Trade Zone generally must be admitted in Privileged Foreign Status (PF Status) unless eligible for Domestic Status. Duty liability will be determined based on the applicable HTSUS classification when the merchandise enters U.S. commerce.
CBP confirmed that the additional duties imposed under the applicable Section 338 tariff provisions are eligible for duty drawback.
Our teams are actively reviewing this guidance to assist with classification reviews, duty impact assessments, FTZ considerations, and entry filing requirements. Please contact your Metro/Omnitrans representative with any questions regarding these changes.
