Section 338 Canada Duties Expand as Import Bans Start September 29

Country of origin7 min read

Executive Summary

Three proclamations signed July 20, 2026 imposed additional 50% duties on specified Canadian products related to alcoholic beverages, dairy and motor vehicles; the effective date was later changed to August 22, 2026.

Scope modifications for alcoholic beverages and motor vehicles took effect September 15, 2026, changing covered tariff classifications and making those duties applicable in addition to Section 232 duties.

Separate proclamations exclude specified Canadian products from importation starting September 29, 2026; certain goods imported before then but not yet entered or withdrawn remain subject to the 50% duty.

CBP guidance sets out Chapter 99 reporting, the order for multiple tariff classifications, Chapter 98 treatment, foreign-trade-zone rules and drawback eligibility.

The Section 338 measures on certain Canadian products have developed in three stages: additional duties, changes to the products covered, and import bans for specified goods. On July 20, 2026, the President signed Proclamation 11046 on alcoholic beverages, Proclamation 11047 on dairy and Proclamation 11048 on motor vehicles. Each imposed an additional 50% ad valorem duty on products identified in its provisions and annexes.

The duties were originally set to take effect August 19, 2026. A three-day suspension moved the effective date to August 22, 2026. Proclamations signed September 8, 2026 later changed the scope of the alcoholic-beverage and motor-vehicle duties, effective September 15, and excluded certain products from importation starting September 29.

What Did the July Section 338 Proclamations Impose?

The three July proclamations imposed additional duties on specified Canadian products related to alcoholic beverages, dairy and motor vehicles. They do not impose a general 50% charge on all Canadian goods. The proclamations and their annexes define which products are covered.

The stated effective-date trigger is entry for consumption or withdrawal from warehouse for consumption on or after the applicable date. The original date was August 19, 2026, but the President later changed it to August 22. Importers should follow the entry or warehouse-withdrawal trigger stated in the proclamations.

The original proclamations excluded articles subject to Section 232 duties. They also excluded articles subject to the World Trade Organization Agreement on Trade in Civil Aircraft, except unmanned aircraft. For goods subject to the additional duties and admitted to a U.S. foreign-trade zone, the proclamations required privileged foreign status, except for goods eligible for domestic status.

How Did Section 338 Coverage of Canadian Goods Change?

On August 18, 2026, the President signed Proclamation 11056. It suspended the duties for three days and set their effective date at 12:01 a.m. eastern time on August 22, 2026. CBP’s entry guidance explains how to file for covered goods entered or withdrawn from warehouse on or after that date.

On September 8, 2026, the President signed Proclamation 11064 on alcoholic beverages and Proclamation 11065 on motor vehicles. The changes took effect for goods entered for consumption or withdrawn from warehouse for consumption on or after September 15, 2026. Each proclamation specifies which products remain subject to the 50% duty and which are no longer subject to it.

What came in on September 15. Annex I, Part A of the two scope proclamations adds a long list of goods that have little to do with the original three categories. The additions under the alcoholic-beverage duty (heading 9903.03.12) include whiskies and liqueurs in containers of 4 liters or less, a wide range of cheeses, certain chemically modified fats and oils, raw bovine hides, upholstery leather, fox and other furskins, and motorboats. The motor-vehicle duty (heading 9903.03.14) now covers more cheese, graphic and writing paper, iron or steel columns, beams and structures, aluminum profiles, bars, rods, tubes and pipes, base metal fittings such as rivets, buckles, clasps, crown corks, sign plates and welding electrodes, golf carts, passenger vehicles with engines not over 1,000 cc, outboard motorboats of 7.5 m and over, seats and furniture, mattresses and mattress supports, and electric table, desk, bedside and floor lamps. CBP’s updated implementation guidance counts 122 additional tariff classifications and says there are no changes under the dairy duty (heading 9903.03.13).

What came out. Part B removes the duty from whiskies and from liqueurs and cordials in containers over 4 liters. Under the motor-vehicle duty, it also removes salt, Portland cement other than white cement, chemically pure sugars, household tissue stock, refined unwrought lead, certain bed sheets and similar articles of paper, switchgear and switchboards for a voltage not exceeding 1,000 V, and fishing rod parts and accessories. Read Part B at the statistical level: for three of those items, Annex II deletes the eight-digit subheading and reinserts other ten-digit lines of it, so neighbouring products remain dutiable.

Section 232 stacking now differs by measure. The September proclamations make the alcoholic-beverage and motor-vehicle duties applicable in addition to Section 232 duties. The dairy duty retains its original carve-out for articles subject to Section 232. CBP says that from September 15, only goods under heading 9903.03.13 may claim heading 9903.03.15.

Which Canadian Products Are Banned From September 29?

The President signed Proclamation 11061 for alcoholic beverages, Proclamation 11062 for dairy and Proclamation 11063 for motor vehicles on September 8, 2026. Each excludes specified Canadian products from importation into the United States when imported on or after 12:01 a.m. eastern time on September 29, 2026. The trigger is the date of importation, not the date of entry.

  • Alcoholic beverages (Proclamation 11061): beer, wine including sparkling wine, vermouth, cider, sake and other fermented beverages, undenatured ethyl alcohol of 80% or more for beverage purposes, and spirits: brandy, pisco and singani, Irish and Scotch whiskies, bourbon, rye and other whiskies, rum, gin, vodka, liqueurs, bitters, tequila, mezcal and other spirits. Many lines are marked “Packaged.” On those lines, the ban applies only to products in bottles, cans, boxes, kegs or similar direct-to-consumption containers, leaving bulk shipments outside the ban.
  • Dairy (Proclamation 11062): whey protein concentrates, modified whey, fluid and dried whey, invert and other molasses, and non-alcoholic beer.
  • Motor vehicles (Proclamation 11063): one line, 8711.50.00, motorcycles (including mopeds) with a piston engine over 800 cc.

Each proclamation separately addresses goods imported before September 29, 2026, but not yet entered for consumption or withdrawn from warehouse for consumption: those goods remain subject to the applicable 50% duty. Each also provides that if its import ban is invalidated in whole or in part as to an import, the underlying 50% duty applies to that import to the extent of the invalidated ban.

Some spirits changed status twice in two weeks: whiskies and liqueurs in containers of 4 liters or less became dutiable on September 15 and, where listed in the ban annex, cannot be imported from September 29.

How Should Brokers Report Section 338 Duties?

CBP identifies headings 9903.03.12 to 9903.03.16 for these measures. Headings 9903.03.12, 9903.03.13 and 9903.03.14 impose a 50% additional ad valorem rate on products specified by subdivisions of U.S. note 51. Headings 9903.03.15 and 9903.03.16 show a 0% additional rate for specified goods, including certain metal articles, vehicles and parts, wood products, semiconductor articles, patented pharmaceutical articles, and civil aircraft and related articles. CBP says that, as of September 15, only goods subject to 9903.03.13 are eligible to claim 9903.03.15. Other applicable duties and charges still apply.

CBP’s updated reporting-order guidance sets out the following sequence when Chapter 98 or Chapter 99 classifications apply on an entry-summary line:

  1. Chapter 98 classification, if applicable.
  2. Chapter 99 classifications for additional duties, if applicable.
  3. For trade remedies, Section 301, then Section 338, then Section 232, then Section 201 duties and any applicable Section 201 quota.
  4. Chapter 99 replacement-duty or other-use classifications, then other quota classifications, if applicable.
  5. Chapter 1 to 97 classification.

CBP says to report entered value on the Chapter 1 to 97 classification unless Chapter 98 reporting provisions require otherwise. The Section 338 additional duty generally does not apply when an entry is properly claimed under a Chapter 98 provision and CBP agrees the claim is appropriate, subject to exceptions. Those exceptions include subchapter XXIII of Chapter 98, subheadings 9802.00.40, 9802.00.50 and 9802.00.60, and heading 9802.00.80. For the three specified subheadings, the additional duty applies to the value of repairs, alterations or processing performed. For heading 9802.00.80, it applies to the value of the article assembled abroad, less the cost or value of U.S. products.

Covered goods admitted to a foreign-trade zone on or after the applicable effective date must be admitted in privileged foreign status unless eligible for domestic status. CBP’s September guidance also says duties under headings 9903.03.12 to 9903.03.14 are eligible for drawback.

When Do the Section 338 Canada Duties and Bans Start?

  • July 20, 2026, signing date: The President signed the three initial Section 338 proclamations.
  • July 23, 2026, publication date: The initial proclamations were published in the Federal Register.
  • August 19, 2026, original effective date: The original proclamations set this date for the additional duties.
  • August 18, 2026, signing date: The President signed the three-day suspension proclamation.
  • August 22, 2026, effective date: The revised effective date for the additional duties.
  • September 8, 2026, signing date: The President signed the scope-modification and import-exclusion proclamations.
  • September 14, 2026, publication date: Those proclamations were published in the Federal Register.
  • September 15, 2026, effective date: The alcoholic-beverage and motor-vehicle scope changes apply to goods entered or withdrawn on or after this date.
  • September 29, 2026, effective date: The import bans apply to goods imported on or after this date.

How Should Importers of Canadian Goods Prepare?

Screen Canadian-origin lines at ten digits. Check every Canadian-origin line against Part A, Part B and the three ban annexes. The additions go well beyond drinks, dairy and cars, and some removals apply only to single statistical lines.

Move or stop banned goods before September 29. To stay outside the ban, goods on the ban lists must be imported before 12:01 a.m. eastern time on September 29. They then owe the 50% duty when entered.

Update broker instructions. Confirm the Chapter 99 heading for each line, CBP’s reporting order, whether Section 232 duties now stack, any Chapter 98 claim and its limits, foreign-trade-zone status and drawback.

What Remains Unclear About the Section 338 Bans?

The annex descriptions are stated to be for informational purposes only. The proclamations refer questions about the scope of particular HTSUS provisions to CBP, so a description that appears to fit is not conclusive. Each ban proclamation also provides that if a ban is invalidated as to an import, the 50% duty applies to that import instead, a point that matters to anyone planning around a legal challenge.

The proclamations authorize further implementing guidance and technical or ministerial corrections to the tariff schedule. The lists have already changed once since August 22. Treat the current annexes and CBP’s attachment as the operative lists, and check them again before each shipment of a covered product.

Sources

This publication is for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. Reading it does not create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act on this information without seeking advice from qualified counsel. The views expressed are those of this site and its owner as of the date of publication. Although we try to keep this content complete, accurate and up to date, we assume no responsibility for its completeness, accuracy or timeliness.

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