CBP Announces Changes to 50% Section 338 Tariffs on Canadian Imports, Effective October 30, 2026

U.S. Customs and Border Protection (“CBP”) has announced significant modifications to the 50% additional tariffs imposed on certain Canadian imports under Section 338 of the Tariff Act of 1930. Effective October 30, 2026, 100 additional Harmonized Tariff Schedule of the United States (“HTSUS”) classifications will become subject to the additional duties, while 22 classifications will be removed from their scope.

The changes were announced in CSMS #70314289 and implement the Presidential Proclamation issued on October 23, 2026, entitled “Further Modifying the Scope of Products of Canada Subject to the Additional Duties Imposed to Offset Canadian Discrimination Against the Commerce of the United States With Respect to Motor Vehicles.”

Background: Section 338 Tariffs on Canadian Goods

On July 20, 2026, the President issued three Proclamations imposing additional 50% ad valorem duties on certain products of Canada under Section 338 of the Tariff Act of 1930. These measures were intended to address alleged Canadian discrimination against U.S. commerce involving alcoholic beverages, dairy products, and motor vehicles.

Following a temporary suspension, the additional duties became effective on August 22, 2026. The Administration subsequently modified the scope of certain covered products through Presidential Proclamations issued on September 8, 2026.

The October 23 Proclamation represents another modification to these measures, specifically affecting the products covered by HTSUS heading 9903.03.14, which implements the Section 338 duties associated with Canadian motor vehicle trade practices.

What Changes on October 30, 2026?

Beginning at 12:01 a.m. Eastern time on October 30, 2026, the following changes will apply to Canadian goods entered for consumption or withdrawn from warehouse for consumption:

1. Removal of 22 HTSUS Classifications

CBP has removed 22 HTSUS classifications from the scope of the additional 50% duties under heading 9903.03.14.

These exclusions cover products classified under certain provisions of Chapters 12, 39, 44, 48, 84, and others, including selected plastics, wood products, paper products, and machinery.

Importers of affected merchandise should review their tariff classifications to determine whether their goods are now excluded from the additional duties.

2. Addition of 100 HTSUS Classifications

At the same time, CBP has expanded the scope of heading 9903.03.14 to include 100 additional HTSUS classifications.

Canadian products falling within these newly designated classifications will become subject to an additional 50% ad valorem duty, unless an applicable exclusion or exemption applies.

Importers should carefully review the expanded list of covered classifications, particularly because the changes may affect goods beyond finished motor vehicles and automotive components.

CBP has published a complete revised list of covered HTSUS classifications, with the newly added classifications identified in bold.

3. No Changes to Other Section 338 Tariff Lists

Importantly, CBP confirmed that the October 30 modifications do not affect the classifications covered by HTSUS headings 9903.03.12 or 9903.03.13.

Those provisions continue to impose additional 50% duties on covered Canadian products, subject to applicable exclusions.

Exemptions and Other Important Considerations

Although the October 23 Proclamation modifies the scope of the Section 338 duties, CBP’s guidance also reiterates several important provisions affecting their application.

Certain Products Remain Eligible for Exemptions. HTSUS heading 9903.03.15 provides an exemption for certain products, including specified steel, aluminum, copper, automotive, wood, semiconductor, and patented pharmaceutical products. However, CBP clarified that, since September 15, 2026, this exemption may only be claimed for goods subject to heading 9903.03.13.

Separately, heading 9903.03.16 provides an exemption for qualifying civil aircraft, aircraft parts, and related products meeting the applicable requirements.

Chapter 98 Treatment. Certain goods properly entered under Chapter 98 of the HTSUS may be exempt from the additional Section 338 duties. However, important exceptions apply, including goods entered under subheadings 9802.00.40, 9802.00.50, 9802.00.60, and heading 9802.00.80. For these provisions, the additional duties generally apply to the applicable foreign processing or assembly value, as specified by CBP.

Foreign Trade Zones. Covered Canadian merchandise admitted into a U.S. foreign trade zone generally must be admitted in privileged foreign status, unless eligible for domestic status.

Drawback. CBP has confirmed that the additional duties imposed under headings 9903.03.12 through 9903.03.14 remain eligible for drawback, potentially allowing qualifying importers to recover duties under applicable drawback procedures.

Importers should also be aware that the Section 338 duties do not eliminate other applicable duties, including antidumping and countervailing duties, taxes, fees, or other charges.

What Should Importers Do?

With the October 30 effective date approaching, importers of Canadian merchandise should promptly review their existing HTSUS classifications against CBP’s updated list.

Importers should determine whether their products fall within the 100 newly covered classifications or the 22 classifications removed from the scope of the additional duties. They should also evaluate whether any applicable exemptions, Chapter 98 provisions, or drawback opportunities may reduce their duty exposure.

Because the additional 50% duties can substantially increase landed costs, importers should coordinate with their customs brokers to ensure that entries filed on or after October 30, 2026, reflect the revised tariff requirements.

Liang + Mooney, PLLC regularly assists importers with tariff classification, trade remedies, customs compliance, and strategies to minimize duty exposure. Businesses affected by the latest Section 338 modifications are encouraged to contact our firm to evaluate their obligations and available options.