Published August 22, 2026
U.S. 50% Section 338 Duties Take Effect as Canada Sets September 8 Counter-Tariff Date
The three-day suspension expired at 12:01 a.m. eastern time, placing covered Canadian goods under new U.S. entry requirements. Hours later, Canada specified that its dollar-for-dollar response would start the Tuesday after Labour Day and named the sectors it intended to target, while leaving product-level details for a later release.
Section 338 additional duties are now an entry-time obligation
At 12:01 a.m. eastern time on August 22, the additional duties imposed by Proclamations 11046, 11047, and 11048 became effective for covered Canadian-origin goods entered for consumption or withdrawn from warehouse for consumption. The start date had been moved from August 19 by Proclamation 11056.
Under CBP CSMS #69606660, HTSUS 9903.03.12, 9903.03.13, and 9903.03.14 carry a 50% additional ad valorem rate for the Canadian articles identified in U.S. note 51(b). HTSUS 9903.03.15 and 9903.03.16 carry a 0% Section 338 rate for the specified sectoral and civil-aircraft categories in notes 51(c) and 51(d). The 0% headings are reporting provisions, not a waiver of ordinary duties, Section 232 duties, AD/CVD, or other charges that otherwise apply.
Canada identifies September 8 and the intended target sectors
In remarks on August 22, Prime Minister Mark Carney said Canada would match Washington’s new tariffs dollar for dollar. He said the countermeasures would come into force on the Tuesday after Labour Day—September 8, 2026—and would be concentrated in steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, including products then subject to U.S. Section 232 and Section 338 tariffs. Read the Prime Minister’s August 22 remarks.
A separate readout of the First Ministers’ Meeting confirmed the timing and said further details would follow. As of August 22, Canada had not published the tariff-item list, the rate assigned to each product, the in-transit rule, or the final customs order. Those missing elements were therefore not yet usable for Canadian import-entry calculations. See the official meeting readout.
What the escalation changes for cross-border supply chains
U.S.-bound shipments
Importers must determine Canadian origin, map the Chapter 1–97 tariff line to U.S. note 51, report the correct Chapter 99 heading, and include the added duty in bond and landed-cost calculations. Entries spanning the midnight cutoff deserve a timestamp review.
Canada-bound shipments
September 8 became a firm planning date, but the absence of a product list meant exposure could not yet be calculated at the tariff-item level. Contracts and quotes needed a provisional tax-change clause rather than an assumed counter-tariff.
The bilateral talks were suspended, so businesses could not rely on an imminent agreement to reverse either measure. The legal treatment still had to follow the instruments in force on the relevant entry date.
Action list for importers and brokers
- Audit all Canadian entries and warehouse withdrawals crossing the 12:01 a.m. eastern cutoff on August 22.
- Validate origin and tariff classification against CBP’s attached Section 338 Canada HTS list; retain the mapping in the entry file.
- Recalculate duty exposure and continuous-bond sufficiency for importers with recurring covered Canadian goods.
- For FTZ admissions, confirm privileged foreign status and the duty rate applicable when merchandise later enters U.S. commerce.
- For Canada-bound goods, identify exposure to the announced sectors but wait for the official tariff-item list before assigning a rate.
What to watch next
Canada said product-level counter-tariff details would be released in the coming days. Importers also needed to watch for the formal U.S. HTS revision and Federal Register publication completing the Section 338 implementation record.
Frequently asked questions
Did the 50% U.S. duty actually begin on August 22?
Yes. The duty applies to covered Canadian goods entered for consumption or withdrawn from warehouse for consumption at or after 12:01 a.m. eastern time on August 22.
Are Canadian autos automatically charged the new 50% Section 338 rate?
No. CBP’s 0% heading 9903.03.15 covers specified vehicle and parts categories under U.S. note 51(c). Other applicable duties, including Section 232 treatment where relevant, must still be evaluated.
When will Canada’s new counter-tariffs start?
Canada announced September 8, 2026. The product list and product-specific rates had not been published as of August 22.
Can an importer use the shipment date to avoid the new U.S. duty?
No. The controlling trigger in the proclamations and CBP guidance is the date and time of entry for consumption or withdrawal from warehouse for consumption.
Sources and publication dates
- White House: Proclamation 11056 changing the effective date — August 18, 2026; duties effective August 22.
- CBP CSMS #69606660: Section 338 Canada filing guidance — August 21, 2026.
- Prime Minister of Canada: remarks on the trade response — August 22, 2026.
- Prime Minister of Canada: First Ministers’ Meeting readout — August 22, 2026.