Canada's 50% Section 338 tariff: what importers should do before August 22, 2026
An additional 50% duty on certain Canadian goods takes effect on August 22, 2026 (moved from August 19 by Proclamation 11056), 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 August 24, 2026. See our live status page for current data.
Update, August 24, 2026: Proclamation 11056 (FR doc 2026-17294, signed August 18, published August 24) temporarily suspended these duties and moved the effective date from August 19 to August 22, 2026. Entries made between August 19, 2026 and August 21, 2026 are not subject to the Section 338 duty; CBP guidance (CSMS #69606660) confirms the duties apply to goods entered on or after 12:01 a.m. ET on August 22. If you deposited the 50% on an entry in that three-day window, talk to your broker about correcting the entry.
On July 20, 2026, the President signed three proclamations imposing an additional 50% ad valorem duty on certain products of Canada. They took effect at 12:01 a.m. ET on August 22, 2026 (originally August 19; moved by Proclamation 11056, see the update above). 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 22, 2026.
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, and so is the scope. It just isn’t in the tariff schedule yet. Each proclamation carries an annex listing the covered 8-digit subheadings, under three Chapter 99 headings: 9903.03.12 (alcoholic beverages), 9903.03.13 (dairy), and 9903.03.14 (motor vehicles), each charging the applicable subheading’s duty plus 50%. Covered products range from wine to hockey sticks to cement. What has not happened yet is USITC folding those headings into the published HTS, or CBP issuing its entry guidance. So the authoritative scope lives in the Federal Register annexes today; it just isn’t in the machine-readable USITC feed most tools ingest.
So GET /api/v1/tariffs/resolve won’t return a Section 338 measure for a date before August 22, 2026, which is correct, since the duty isn’t owed until then. What we won’t do is invent a rate from a guessed prefix, and we don’t have to: the annex headings and their covered subheadings are the authoritative scope. We load that scope from the annexes directly, rather than waiting for USITC to fold the headings into the published HTS, so the 50% resolves on covered Canadian lines for entries on or after August 22, 2026.
section_338 is already declared in our OpenAPI schema, so when the scope loads it appears in additional_measures alongside every other program, and a strict client will not break on the new value.
If a vendor is quoting you a Section 338 number for a specific Canadian HTS code, you can check it against the annex: it should sit under 9903.03.12 (alcohol), 9903.03.13 (dairy), or 9903.03.14 (motor vehicles), on a subheading actually listed in that proclamation’s annex.
What to do before August 22, 2026
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 22, 2026. 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 from August 22, 2026. 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 22, 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 as specific 8-digit subheadings in an annex to each of the three proclamations: alcoholic beverages under 9903.03.12, dairy under 9903.03.13, and motor vehicles under 9903.03.14. USITC hasn’t folded those headings into the published HTS yet and CBP’s entry guidance is still expected, but the authoritative scope exists in the Federal Register annexes now, so be sceptical of anyone quoting a code that isn’t actually on one of those annex lists.
Why doesn’t your API return a Section 338 rate yet?
For dates before August 22, 2026 there’s no duty to return. For the covered scope, the subheadings are defined in the proclamation annexes (headings 9903.03.12/.13/.14); USITC just hasn’t published them into the HTS yet. We load that scope from the annexes so the 50% resolves for entries on or after August 22, 2026, and section_338 is already in our schema so a strict client won’t break when it appears.
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.