Canada's 50% Section 338 tariff: what importers should do before August 19
An additional 50% duty on certain Canadian goods takes effect on August 19, 2026, under a statute that has been dormant since the 1930s. USMCA origination will not exempt you. Here is who is exposed, who is carved out, and what to check on open purchase orders now.
Last verified against U.S. regulations as of July 22, 2026. See our live status page for current data.
On July 20, 2026, the President signed three proclamations imposing an additional 50% ad valorem duty on certain products of Canada. They take effect at 12:01 a.m. ET on August 19, 2026. Entries before that moment are unaffected.
If you import from Canada, you have about four weeks. This guide covers what is known, what is not known yet, and what you can usefully do in the meantime. For the reference detail on the program itself, see our Section 338 page.
Why this one is not like the others
Every tariff program you already deal with runs on a familiar statute. Section 301 covers the China lists. Section 232 covers steel, aluminium, copper, and autos on national-security grounds. Section 122 was the temporary balance-of-payments surcharge. IEEPA was the emergency authority the Supreme Court struck down in February.
This is none of those. Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338) lets the President impose duties of up to 50% to offset discrimination against U.S. commerce. It has been dormant since the 1930s and 1940s. This is the first time it has ever been used to actually impose tariffs.
Two practical consequences follow. The 50% is not a policy choice that might be dialled up later; it is the statutory ceiling. And because the authority is untested in its modern form, the legal risk profile is different from a mature program like Section 301.
Each of the three proclamations offsets a different Canadian measure: tariffs and quotas on U.S. motor vehicles, provincial restrictions on U.S. alcoholic beverages, and dairy import quotas under Canada’s supply-management system.
USMCA will not save you
This is the assumption most likely to cost someone money, so it gets its own section.
The duty applies regardless of whether a good qualifies as USMCA-originating. A Canadian good with a perfect certificate of origin, entering duty-free at the base rate today, can still pick up the full 50% on August 19.
That surprises people, because USMCA relief is the reflex answer for Canadian sourcing. But it is not unusual in tariff law. Section 232 works the same way: USMCA origination has never exempted Canadian steel from the 232 duty. Trade-agreement preference governs the base rate. Chapter 99 additional duties sit on top of it and follow their own rules.
So do not treat a USMCA-qualifying line as safe. Origination is the wrong test here.
The Section 232 carve-out, which does help some importers
The proclamations exclude goods already subject to Section 232. They also exclude energy, potash, fish, certain critical minerals, and articles covered by the WTO Civil Aircraft Agreement (other than unmanned aircraft).
That 232 exclusion is the most useful one, because it is testable today. If a Canadian-origin code already carries a Section 232 duty, it is carved out of Section 338 rather than stacked on top of it.
Take steel pipe, HTS 7306.30.50, Canadian origin:
| Program | Chapter 99 | Rate | Why |
|---|---|---|---|
| MFN base | (none) | 0.0% | USITC general rate. |
| Section 232 (steel) | 9903.82.02 | + 50% | Steel articles and high-intensity derivatives. Applies regardless of USMCA origination. |
| (not yet issued) | Carved out: the good is already subject to Section 232. | ||
| Total | 50% | Not 100%. |
An importer who assumes the new duty stacks on everything would price this line at 100% and lose the deal. The carve-out is the difference between a viable quote and an imaginary one.
Now the other direction. A Canadian good with no 232 exposure, if it turns out to be inside one of the annexes, looks like this:
| Program | Chapter 99 | Rate | Why |
|---|---|---|---|
| MFN base | (none) | base rate | Unchanged. USMCA preference still applies here. |
| Section 338 | (not yet issued) | + 50% | In addition to any other duties. Origination is irrelevant. |
| Total | base + 50% | Applied to customs value, not compounded. |
The duties are applied independently to the customs value and then summed. They do not compound.
What we can tell you, and what we cannot
Here is the part most tariff tools will get wrong, so it is worth being blunt about.
The rate and the date are known. The scope is not. Covered products are listed in an annex to each proclamation, and range from wine to hockey sticks to cement. But the Chapter 99 headings that will carry these duties in the HTS have not been published yet. Until USITC publishes them, there is no authoritative machine-readable mapping from an HTS code to “covered” or “not covered.”
So GET /api/v1/tariffs/resolve does not return Section 338 measures today. That is deliberate. We could guess a 9903.xx.xx prefix and start returning 50% on codes we think are in the annexes. We will not, because a guessed prefix means over-charging real shipments on codes that were never covered. We would rather return a number we can point at a published heading for.
What we have done is prepare the wiring. section_338 is already declared in our OpenAPI schema, so the day the headings publish it appears in additional_measures alongside every other program, and a strict client will not break on the new value.
If a vendor is already quoting you a confident Section 338 number for a specific Canadian HTS code, ask them which published heading it comes from. As of today there isn’t one.
What to do before August 19
Four things worth doing in the next four weeks.
Pull your Canadian-origin lines. Get the list of HTS codes you import from Canada with shipments landing on or after August 19. That list is your exposure surface, and you want it before the headings drop, not after.
Check which of those already carry Section 232. Anything already paying a 232 duty is carved out. This is the one part of the analysis you can finish today, and it may remove a meaningful chunk of the list. You can check code by code in the HTS browser or in bulk through the API.
Stop relying on USMCA status as a filter. If your internal landed-cost model treats USMCA-originating Canadian goods as exempt from additional duties, it will be wrong on August 19. Fix that assumption now rather than during a customs dispute.
Watch for the Chapter 99 headings. The scope becomes concrete the moment USITC publishes. If you want to hear about it when it happens rather than from your broker, our changelog records every data change we ship, and watchlists alert on codes you care about.
Common questions
Does USMCA exempt my goods from the Section 338 tariff? No. The duty applies regardless of whether a good qualifies as USMCA-originating. Trade-agreement preference governs the base rate; Chapter 99 additional duties follow their own rules and this one has no origination exemption.
When exactly does the Section 338 tariff start? 12:01 a.m. Eastern Time on August 19, 2026. Entries before that moment are not affected.
Does the 50% stack on top of Section 232? No, it is the opposite. Goods already subject to Section 232 are excluded from Section 338. A Canadian steel article paying the 232 duty does not also pay the 50%.
Which Canadian products are actually covered? The covered products are listed in an annex to each of the three proclamations, and the proclamations target motor vehicles, alcoholic beverages, and dairy. The Chapter 99 headings that define the scope in the HTS have not been published yet, so there is no authoritative code-level list today. Be sceptical of anyone who claims otherwise.
Why doesn’t your API return a Section 338 rate yet?
Because the HTS subheadings that define the scope do not exist yet. Guessing a Chapter 99 prefix would mean over-charging on codes that were never covered. The section_338 value is already in our schema and will populate the day the headings publish.
Can the rate go above 50%? No. Section 338 caps the duty at 50% by statute, so 50% is the ceiling rather than a starting point.