A 50% additional U.S. duty on certain Canada-origin goods took effect at 12:01 a.m. Eastern on August 22, 2026, under Section 338 of the Tariff Act of 1930. CUSMA does not exempt covered goods. Coverage is set by HTS classification, so the only reliable way to know your exposure is to screen your codes.

What took effect

The duty applies to specified products of Canada entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern on August 22, 2026. The entry date governs, not the ship date, and no in-transit relief was granted.

Three proclamations signed July 20, 2026 cover alcoholic beverages, dairy and motor vehicles, published at 91 FR 46639, 91 FR 46653 and 91 FR 46663. The original August 19 start was suspended for three days by Proclamation 11056 while talks continued. Those talks ended without agreement on August 21.

Section 338 differs from the trade remedies most importers know. It required no investigation, and it carries no expiry date.

Which goods are covered

CBP published the affected classifications in CSMS # 69606660 on August 21, with an attachment mapping each Chapter 1 to 97 code to its Chapter 99 heading. Headings 9903.03.12, 9903.03.13 and 9903.03.14 carry the 50% rate.

The sector labels understate the reach. Reported coverage includes wine, cement, plywood, electrical equipment, hockey sticks and medical disposables. A product can sit inside a covered annex without being dairy, alcohol or automotive in any commercial sense, which is why sector summaries are not a usable screen.

The 50% sits on top of everything else. Covered goods remain subject to MFN duty, Section 232 where applicable, antidumping and countervailing duties, and all other fees and charges.

What is excluded

Two headings sit at a 0% additional rate.

9903.03.15 covers aluminum, steel and copper articles and derivative aluminum or steel articles; passenger vehicles and light trucks and their parts; medium- and heavy-duty vehicles and their parts; wood products; semiconductor articles; and patented pharmaceutical articles.

9903.03.16 covers civil aircraft other than military and unmanned aircraft, their engines, parts, components and subassemblies, and ground flight simulators and their parts.

These are exclusions from Section 338 only. Most of these categories still carry Section 232 duties, and the 0% heading still has to be declared on the entry.

CUSMA does not exempt covered goods

Goods qualifying for CUSMA preference still pay the 50%. Origin under the agreement creates no exemption from this action.

Qualification still removes the Most Favoured Nation rate in Column 1 of the HTSUS. Goods that do not qualify pay MFN plus the 50% plus anything else applicable, so a valid origin claim is worth more in absolute terms than it was a week ago, just not for the reason importers are used to.

One recovery route is worth quantifying: the Section 338 duty is eligible for drawback. If you re-export or manufacture for export, our duty drawback team can size the claim.

Screen your codes

Three tools, in this order.

1. Tariff Impact Checker — built for this action. Enter your HTS codes with Canada as the country of origin and it flags which are caught by Section 301, 232 or 338, which rule applies, the effective date, and the rate before and after. First ten codes free, no account. Unmatched codes come back listed as checked rather than dropped.
2. HTS Tariff Classification (USA) — confirm a flagged code is classified correctly before you rely on the result. A misfiled entry at a 50-point rate step is expensive to unwind.
3. HS Tariff Classification (CAN) — for your northbound flows, which face a separate Canadian measure from September 8.

Canada published its matching counter-tariffs on August 25. We cover the rates, sectors and origin test in Canada's counter-tariffs take effect September 8.

If you import from Canada and want your classification list reviewed against the CBP schedule this week, talk to our team.