Critical Impact: USMCA Does Not Exempt Covered Goods from Section 338 Tariffs
On September 8, 2026, President Trump issued a series of proclamations introducing new import restrictions and modifying existing Section 338 tariffs on certain products from Canada.
The measures affect products associated with the motor vehicle, dairy and alcoholic beverage sectors, with important implications for importers of Canadian goods.
Key Impact for Importers
Importers should be aware of two significant aspects of the Section 338 tariffs:
USMCA-Originating Goods Are Still Subject to Section 338 Tariffs
Section 338 tariffs apply to all covered goods regardless of whether the goods qualify as originating under the U.S.-Mexico-Canada Agreement (USMCA).
This means that USMCA qualification does not exempt an otherwise covered Canadian product from the additional Section 338 tariff.
Importers should not assume that products eligible for USMCA preferential treatment are protected from these additional duties and should review their tariff exposure accordingly.
Section 338 Duties Are Additional to Section 232 Duties
For goods that are also subject to tariffs under Section 232 of the Trade Expansion Act of 1962, the Section 338 tariff applies in addition to the applicable Section 232 tariff.
This potential duty stacking may result in a substantially higher total duty liability for affected products, particularly in industries already subject to Section 232 measures.
Importers should review both the applicable Section 338 and Section 232 requirements when calculating potential landed costs and duty exposure.
New Import Bans Effective September 29
Effective 12:01 a.m. ET on September 29, 2026, certain Canadian products identified in the applicable proclamations will be prohibited from importation into the United States.
The new import restrictions apply to specified Canadian products associated with:
- Motor vehicles
- Dairy products
- Alcoholic beverages
Affected products are identified through Harmonized Tariff Schedule of the United States (HTSUS) classifications included in the annexes to the applicable proclamations.
Importers should carefully review the product-specific annexes to determine whether their goods will be subject to the import prohibition beginning September 29.
Section 338 Tariff Scope Changes Effective September 15
The Administration also modified the scope of the existing 50% Section 338 additional duties on certain Canadian goods.
Effective 12:01 a.m. ET on September 15, 2026:
- Certain Canadian products will be added to the scope of the 50% Section 338 tariffs.
- Certain products currently subject to Section 338 tariffs will be removed.
- Applicable HTSUS classifications will be revised accordingly.
The Administration indicated that certain products, including rock salt and cement, will be removed from the tariff scope, while other products, including all-terrain vehicles (ATVs) and additional dairy products, will be added.
Importantly, for products that remain or become subject to Section 338:
USMCA qualification does not remove the Section 338 tariff, and Section 338 duties apply in addition to applicable Section 232 tariffs.
What Importers Should Do
Given the potential impact on duty liability and admissibility, importers of Canadian goods should review their products and upcoming shipments as soon as possible.
Buckland recommends that importers:
- Review the applicable HTSUS classifications to determine whether products are covered by the revised Section 338 tariff scope or new import prohibitions.
- Do not rely on USMCA qualification as an exemption from Section 338 duties. Covered goods remain subject to Section 338 tariffs even when they qualify as USMCA-originating.
- Evaluate potential Section 338 and Section 232 duty stacking to understand the full duty exposure and impact on landed costs.
- Identify shipments that may be entered on or after September 15, 2026, when the revised tariff scope takes effect.
- Identify affected products that may become prohibited from importation beginning September 29, 2026.
- Review sourcing, inventory, pricing and shipment schedules for potentially affected goods.
Because these changes may significantly affect duty costs and the ability to import certain products, importers should closely review the applicable proclamations and product annexes before shipping affected Canadian goods.
Buckland will continue to monitor guidance from U.S. Customs and Border Protection (CBP) regarding implementation of these measures.
If you have questions about how these changes may affect your imports, please contact your Buckland representative.