U.S. Customs and Border Protection (CBP) has issued CSMS #69606660, providing entry filing guidance for the Section 338 additional duties on certain products of Canada.
Following the temporary three-day suspension announced on August 18, the additional duties became effective for applicable Canadian goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on August 22, 2026.
The measures stem from three Presidential Proclamations issued July 20, 2026, addressing Canadian measures related to alcoholic beverages, dairy products, and motor vehicles.
Section 338 Duty Treatment
CBP has provided the following Chapter 99 classifications for affected Canadian goods:- HTSUS 9903.03.12 – Articles of Canada provided for in subdivision (b)(1) of U.S. Note 51: 50% additional ad valorem duty
- HTSUS 9903.03.13 – Articles of Canada provided for in subdivision (b)(2) of U.S. Note 51: 50% additional ad valorem duty
- HTSUS 9903.03.14 – Articles of Canada provided for in subdivision (b)(3) of U.S. Note 51: 50% additional ad valorem duty
- HTSUS 9903.03.15 – Certain aluminum, steel and copper articles and derivatives; passenger vehicles and light trucks and their parts; medium- and heavy-duty vehicles and their parts; wood products; semiconductor articles; and patented pharmaceutical articles, as provided in subdivision (c) of U.S. Note 51.
- HTSUS 9903.03.16 – Certain civil aircraft, engines, parts, components and subassemblies, ground flight simulators, and related parts and components, as provided in subdivision (d) of U.S. Note 51.
Other Duties Continue to Apply
Products classified under the applicable Section 338 provisions remain subject to any other duties, taxes, fees, exactions, and charges that would otherwise apply, including antidumping and countervailing duties and other applicable trade remedies. Accordingly, the Section 338 duty may apply in addition to other existing duties where applicable.Chapter 98 Treatment
CBP has also provided specific guidance for merchandise entered under Chapter 98. Generally, the Section 338 additional duty does not apply where goods are properly entered under an eligible Chapter 98 provision. However, exceptions apply to certain provisions, including:- Subheadings 9802.00.40, 9802.00.50, and 9802.00.60, where the additional duty applies to the value of qualifying repairs, alterations, or processing performed abroad.
- Heading 9802.00.80, where the additional duty applies to the value of the article assembled abroad, less the cost or value of qualifying U.S. components.
Foreign Trade Zones
Products subject to the Section 338 additional duties that are admitted into a U.S. Foreign Trade Zone generally must be admitted in privileged foreign status, unless eligible for domestic status. Upon entry for consumption, the merchandise will be subject to the applicable ad valorem duty based on its HTSUS classification.Drawback
CBP has confirmed that the applicable Section 338 additional duties are eligible for drawback, subject to applicable requirements.Entry Filing Sequence
CBP has also clarified the required sequence for reporting HTSUS classifications on entry summary lines involving Chapter 98, Chapter 99, and trade remedy provisions. Where applicable, filers should report classifications in the following order:- Chapter 98 provision
- Chapter 99 provision for additional duties
- Trade remedy Chapter 99 classifications in this order:
- Section 301
- Section 122
- Section 232
- Section 201 duties
- Section 201 quota
- Chapter 99 provisions for replacement duties or other uses
- Other applicable Chapter 99 quota provisions
- Chapter 1–97 commodity classification