New 50% Section 338 Tariffs on Certain Canadian Goods
To Our Valued Partners,
New 50% Section 338 Tariffs on Certain Canadian Goods
Effective August 19, 2026
On July 20, 2026, President Trump signed three proclamations under Section 338 of the Tariff Act of 1930 imposing an additional 50% tariff on specified products of Canada. The actions respond to Canada’s treatment of U.S. exports involving motor vehicles, alcoholic beverages, and dairy. According to the Office of the U.S. Trade Representative, the tariffs cover nearly $20 billion in Canadian imports.
The new tariff does not apply to every product imported from Canada. Hundreds of HTSUS classifications are listed across the three actions, covering products ranging from wine, spirits, and dairy ingredients to sporting goods, cement, wood products, chemicals, plastics, paper, machinery, electronics, furniture, and other specified goods. Importers must review the exact HTSUS classification to determine whether a product is covered.
The Three Tariff Actions
Motor Vehicle Action
This proclamation responds to Canada’s tariff and quota treatment of U.S. motor vehicle exports. Covered Canadian products will be reported under HTSUS 9903.03.14. The tariff list is much broader than vehicles and includes hundreds of classifications across many industries.
Alcoholic Beverage Action
This proclamation responds to restrictions imposed by Canadian provinces and territories on the purchase, distribution, and retail sale of U.S. alcoholic beverages. Covered Canadian products will be reported under HTSUS 9903.03.12 and include specified alcoholic beverages and several other classifications.
Dairy Action
This proclamation responds to differences between Canada’s administration of cheese tariff-rate quotas under USMCA and its treatment of European Union cheese under the Canada-European Union Comprehensive Economic and Trade Agreement. Covered Canadian products will be reported under HTSUS 9903.03.13 and include specified dairy products, ingredients, and other listed goods.
Important Exclusions
The White House states that the new tariffs will not apply to:
- Energy
- Potash
- Products subject to Section 232 tariffs
- Certain fish products
- Certain critical minerals
The proclamations also exclude qualifying civil aircraft and aircraft parts covered by the World Trade Organization Agreement on Trade in Civil Aircraft. Unmanned aircraft are not included in that exclusion.
What Importers Should Do Now
Importers with Canadian goods expected to enter the United States on or after August 19 should:
- Confirm the full HTSUS classification and country of origin.
- Check the classification against the applicable covered-product annex.
- Do not assume that USMCA qualification removes the new tariff.
- Review shipments already moving because the entry date, not the shipping date, controls.
- Recalculate duties and landed costs.
- Coordinate with the customs broker before entry.
- Watch for CBP filing instructions or technical corrections before the effective date.
CBP is authorized to issue additional rules, guidance, filing instructions, and technical corrections needed to implement the proclamations.
Resources
Main Announcements
White House Fact Sheet on Additional Tariffs on Canada
USTR Statement on the Section 338 Tariffs
Motor Vehicle Action
Alcoholic Beverage Action
Alcoholic Beverage Proclamation
Dairy Action
We will continue monitoring CBP guidance and implementation details and will share additional updates as more information becomes available. If you have questions about your specific Canadian imports, HTSUS classifications, tariff treatment, exclusions, or upcoming entries, please reach out to us at 833-782-7628.
