U.S. Escalates Section 338 Actions Against Canada: New Import Bans and Expanded 50% Tariffs
Key Dates
New product scope takes effect September 15, 2026
Import bans take effect September 29, 2026
The United States has escalated its Section 338 actions against Canada by adding or removing products from the existing 50% additional tariffs effective September 15, 2026, and prohibiting certain Canadian-origin products from entering the United States effective September 29, 2026.
On September 8, 2026, five proclamations were issued covering Canadian motor vehicles, alcoholic beverages, and dairy products.
What Changed, When, and Why?
The current actions build on three Section 338 proclamations issued July 20, 2026. Those proclamations imposed an additional 50% duty on certain Canadian products tied to disputes over alcoholic beverages, dairy products, and motor vehicles.
The tariffs were scheduled to begin August 19, but the Administration delayed them for three days while the United States and Canada continued discussions. The 50% duties took effect at 12:01 a.m. Eastern Time on August 22, 2026.
The White House says the latest actions respond to Canada’s continued or increased restrictions on U.S. goods, including approximately $20 billion in additional retaliatory tariffs on U.S. exports such as steel, dairy products, and agricultural equipment.
Section 338 of the Tariff Act of 1930 allows the President to impose additional duties or, in certain circumstances, prohibit imports in response to discriminatory foreign treatment. The September actions use that import-ban authority.
Timeline: Two Effective Dates Importers Need to Know
September 15, 2026 – 12:01 a.m. Eastern Time (ET)
New additions and removals from the 50% Section 338 tariff lists become effective.
The changes apply to goods entered for consumption or withdrawn from warehouse for consumption on or after the effective time.
September 29, 2026 – 12:01 a.m. ET
New import bans become effective for specified Canadian-origin products.
The bans apply to covered goods imported on or after September 29.
Covered merchandise imported before September 29, but not yet entered for consumption or withdrawn from warehouse, may still be entered.
That merchandise remains subject to the applicable 50% Section 338 duty.
The September 29 Date Is an Admissibility Cutoff
For merchandise covered by one of the new import-ban Annexes:
Imported before September 29: the merchandise may remain eligible for entry, but the applicable 50% Section 338 duty continues to apply.
Imported on or after September 29: the covered Canadian product is excluded from importation into the United States.
Importers should therefore be particularly careful with shipments moving near the September 29 cutoff. The proclamations do not establish a general vessel-loaded, export-date, or conventional in-transit exception for merchandise simply because it departed Canada or another foreign location before September 29. The operative language is tied to when the merchandise is imported.
U.S. Customs and Border Protection (CBP) is expressly authorized to issue additional regulations, guidance, instructions, determinations, and necessary Harmonized Tariff Schedule of the United States (HTSUS) changes to administer the bans.
Motor Vehicles and Related Products
There are two separate changes associated with the motor-vehicle Section 338 action.
Import Ban — Motorcycles Over 800 cc
Effective September 29, 2026, Canadian-origin merchandise classified under:
HTSUS 8711.50.00 — Motorcycles, including mopeds, and cycles fitted with a reciprocating internal-combustion piston engine of a cylinder capacity over 800 cc is excluded from importation into the United States.
September 15 Expansion of the Motor-Vehicle Section 338 Tariff List
Separately, the Administration is substantially revising the products subject to the 50% Section 338 motor-vehicle action beginning September 15.
Despite being associated with the motor-vehicle dispute, the tariff list is much broader than automobiles alone.
Newly covered products include:
Certain cheese
Writing, drawing, and graphic paper
Structural iron and steel
Aluminum profiles, bars, rods, tubes, and pipes
Flexible metal tubing
Base-metal hardware
Welding electrodes and wire
Golf carts
Certain small-engine passenger vehicles
Outboard motorboats
Seats and furniture
Mattresses
Lighting products
Two vehicle classifications are particularly notable:
HTSUS 8703.10.50 - Golf carts and similar motor vehicles
HTSUS 8703.21.01 - Certain passenger vehicles with spark-ignition engines not exceeding 1,000 cc
Both become subject to the additional 50% Section 338 duty for covered Canadian-origin merchandise entered or withdrawn for consumption on or after September 15.
Products Removed From the Motor-Vehicle Section 338 Tariff
The September 15 action also provides relief for several classifications previously covered by the 50% tariff.
(HTSUS - Product)
2501.00.00 - Salt and pure sodium chloride
2523.29.00 - Portland cement, other than white cement
2940.00.60 - Certain chemically pure sugars
4803.00.40 - Certain tissue, towel and napkin stock
4818.90.0080 - Certain household or hospital paper articles
7801.10.00 - Refined lead, unwrought
8537.10.9120 - Certain switchgear assemblies and switchboards
9507.10.0080 - Fishing rod parts and accessories
For entries on or after September 15, those products are no longer covered by the 50% duty under this Section 338 action.
Alcoholic Beverages
The alcoholic-beverage action contains the broadest of the new import bans.
Effective September 29, 2026, numerous Canadian-origin alcoholic beverages become excluded from importation into the United States.
The Annex covers a wide range of alcoholic beverages, including:
Beer
Sparkling and still wine
Cider
Sake and other fermented beverages
Beverage-grade ethyl alcohol
Brandy
Whiskey
Rum
Gin
Vodka
Liqueurs
Bitters
Tequila
Mezcal
Other beverage spirits
Pay Particular Attention to the “Packaged” Limitation
Not every HTSUS provision in the alcohol Annex is treated identically.
For certain tariff classifications, the Annex contains a scope limitation identified as “Packaged.” The Annex defines that term to include only alcohol products packaged in bottles, cans, boxes, kegs, or other similar direct-to-consumption containers. That distinction matters particularly for classifications involving containers exceeding four liters.
Importers should not assume, however, that all bulk alcohol is automatically excluded from the ban. The “Packaged” limitation applies only where the applicable HTSUS line in the Annex specifically carries that limitation. Other listed classifications are covered without a separate packaged limitation.
Whiskey and Liqueur Changes Effective September 15
The September 15 scope modification makes an important statistical-level change to certain Chapter 22 classifications.
The broader 2208.30.60 whiskey and 2208.70.00 liqueur provisions are replaced with more specific statistical breakouts for purposes of the Section 338 tariff. The action specifically removes:
2208.30.6085 — Whiskies, nesoi, in containers over 4 liters
2208.70.0060 — Liqueurs and cordials, in containers over 4 liters
from the 50% Section 338 list.
Those two statistical provisions also do not appear in the September 29 alcohol prohibition Annex. Based on the September 8 actions, they are therefore not subject to the revised 50% alcohol tariff or the new alcohol import ban. All other applicable tariffs and regulatory requirements still apply.
The Alcohol Tariff Action Also Covers Non-Alcohol Products
Another point importers should not overlook: the name of the Section 338 action describes the underlying trade dispute, not necessarily every commodity subject to the retaliatory tariff.
Effective September 15, the alcohol-related Section 338 list also adds numerous classifications covering cheese, certain chemically modified fats and oils, raw hides and skins, leather, furskins, and motorboats.
Consequently, importers should not screen Canadian shipments solely by asking whether the product is an alcoholic beverage.
Dairy and Food Products
The new dairy-related prohibition is another area where the title can be misleading.
The September 29 import ban does not simply prohibit Canadian cheese or all Canadian dairy products. Instead, its Annex identifies specific whey products and several non-dairy commodities.
Covered Canadian-origin products include:
(HTSUS - Product)
0404.10.05 - Whey protein concentrates
0404.10.08 - Certain modified whey described in General Note 15
0404.10.11 - Certain modified whey described in Additional U.S. Note 10 to Chapter 4
0404.10.15 - Other specified modified whey
0404.10.20 - Fluid whey
0404.10.48 - Certain dried whey described in General Note 15
0404.10.50 - Certain dried whey described in Additional U.S. Note 12
0404.10.90 - Other specified dried whey
1702.90.35 - Invert molasses
1703.10.30 - Certain cane molasses
1703.10.50 - Other cane molasses
1703.90.30 - Certain molasses other than cane
1703.90.50 - Other molasses
2202.91.00 - Non-alcoholic beer
What About Canadian Cheese?
The September 29 dairy ban is not a general Canadian cheese prohibition.
However, numerous cheese classifications are being added to the 50% Section 338 tariff regime through the September 15 scope modifications associated with the alcohol and motor-vehicle actions.
The affected classifications include various types of:
Fresh cheese
Grated or powdered cheese
Processed cheese
Blue-veined cheese
Cheddar
Swiss and Emmentaler
Romano
Parmesan
Provolone
Gouda
Other specified cheeses
That distinction is important:
Certain whey products → prohibited beginning September 29.
Numerous cheese products → subject to a 50% additional duty, depending on classification and the applicable Section 338 list.
Other Industrial and Consumer Products
One of the more unusual aspects of the Section 338 actions is the breadth of merchandise placed under tariffs that bear little resemblance to the underlying dispute.
The September 15 modifications expand the 50% tariff program to additional Canadian-origin products, including:
Paper and paperboard
Structural steel
Aluminum products
Metal fittings and hardware
Welding supplies
Boats
Hides and leather
Furs
Furniture and seats
Mattresses
Lamps and other lighting products
For importers, that creates an important screening rule:
Do not determine Section 338 applicability based on the name of the Presidential action.
A furniture importer may be affected by the “motor vehicles” action. A cheese importer may be affected by either the “alcoholic beverages” or “motor vehicles” action. A boat importer may appear on more than one revised commodity list.
The HTSUS classification and Canadian origin of the merchandise must drive the review.
United States-Mexico-Canada Agreement (USMCA) Does Not Exempt Covered Canadian Products
USMCA qualification does not provide an exemption from these Section 338 actions.
The White House specifically states that the Section 338 tariffs apply to covered goods regardless of whether the merchandise qualifies as originating under USMCA.
The same practical principle applies to the September 29 prohibitions: the ban proclamations do not establish a USMCA-originating-goods exemption.
An importer therefore cannot avoid a Section 338 tariff or an applicable import prohibition simply by making a valid USMCA preference claim.
Section 232 Stacking Changes September 15
The September 8 proclamations change how certain Section 338 duties interact with Section 232 duties.
Previous Rule
Under the original July Section 338 actions, Section 338 duties generally did not apply to merchandise that was already subject to Section 232 duties.
In other words, for covered products, importers generally did not have to pay both the Section 338 duty and the applicable Section 232 duty on the same merchandise.
New Rule Effective September 15
Beginning September 15, the Section 338 actions involving alcoholic beverages and motor vehicles will apply in addition to applicable Section 232 duties.
This means that qualifying merchandise may be subject to:
The regular customs duty;
Any applicable Section 232 duty; and
The additional 50% Section 338 duty.
The actual duty treatment will depend on the product's HTSUS classification and whether a separate Section 232 action applies.
HTSUS and Chapter 99 Changes
To implement this change, the September 8 proclamations amend U.S. Note 51 to remove the following Section 338 provisions from the Section 232 non-stacking language:
9903.03.12 — Section 338 action involving alcoholic beverages
9903.03.14 — Section 338 action involving motor vehicles
Because those provisions are removed from the non-stacking language, the corresponding Section 338 duties may now be collected in addition to Section 232 duties.
The dairy-related Section 338 provision, 9903.03.13, remains within the relevant Section 232 exclusion language under the September amendments. The September 8 actions therefore do not make the dairy Section 338 duty stack with Section 232 duties in the same manner as the alcohol and motor-vehicle provisions.
Practical Effect
For covered Canadian merchandise subject to both programs, the total duty exposure may be substantially higher than the 50% Section 338 duty alone.
Importers should therefore review:
The product's complete HTSUS classification;
Whether the product is subject to a Section 232 action;
Whether Chapter 99 provisions must be reported in a specific sequence; and
Whether any applicable exclusions or exceptions affect the final duty calculation.
A product subject to the alcohol or motor-vehicle Section 338 action may now incur both the additional 50% Section 338 duty and a separate Section 232 duty beginning September 15.
What Importers Should Do Now
Importers of Canadian-origin merchandise should review both currently moving shipments and upcoming purchase orders before the September 15 and September 29 effective dates.
The review should focus on five items:
Confirming the correct HTSUS classification.
Confirming actual country of origin rather than merely country of export.
Screening the HTSUS against both the revised 50% tariff lists and the new prohibited-product Annexes.
Identifying any potential Section 232 stacking.
Reviewing cargo scheduled near the September 29 cutoff before assuming an in-transit shipment will remain admissible.
Particular attention should be given to the following products:
Alcoholic beverages
Whey and protein ingredients
Molasses
Non-alcoholic beer
Motorcycles over 800 cc
Cheese
Small vehicles and golf carts
Steel and aluminum articles
Furniture
Mattresses
Lighting products
Boats
Hides, leather, and furs
CBP has been granted authority to issue additional implementation guidance and make any necessary HTSUS changes to administer these actions. Importers and customs brokers should continue monitoring CBP and Federal Register instructions as the effective dates approach.
Juno Customs Solutions
Juno Customs Solutions will continue monitoring the Section 338 actions, CBP implementation instructions, HTSUS changes, and related Chapter 99 filing requirements.
Importers with Canadian-origin merchandise affected by these actions — particularly goods scheduled to arrive near the September 29, 2026 import-ban effective date — should review their classifications and shipment timing in advance.
The key takeaway is simple: September 15 changes what certain Canadian products will cost to import. September 29 determines whether certain Canadian products can be imported at all.