United States Imposes Section 338 Duties on Canada

Aug. 24, 2026
By: David G. Forgue

On August 22, 2026, the United States imposed new tariffs on Canadian goods imported into the United States. These tariffs are under the authority of Section 338 of the Tariff Ace of 1930 (19 U.S.C. 1338), which the Trump Administration had not used to this point. Section 338 requires findings by the President that a country discriminates against U.S. commerce and that the discrimination disadvantages U.S. commerce. The new duties are intended to offset this. Read our previous articles on the topic here and here.

The Federal Register notices were previously published here, here, and here. Therefore, Customs was able to issue CSMS 69606660 a few hours before the duties went into effect. Included with the CSMS was a list of tariff provisions subject to the new tariffs. It has been reported that the duties have been imposed on slightly less than 6% of Canadian imports into the United States. Excluded are articles subject to 232 duties, certain civil aviation articles, and certain Chapter 98 provisions. However, Article 338 duties are eligible for drawback. A duty of 50% will be imposed in those articles subject to Section 338 duties.

While the new Section 338 duties promise to disrupt trade between the U.S. and Canada, it is possible that more disruptions are on the way. First, Canada’s government has indicated that it will impose dollar-for-dollar retaliation on the U.S. Meanwhile, 19 U.S.C. 1338(b) allows the President to bar imports from a country (or part of a country) if

any foreign country has not only discriminated against the commerce of the United States, as aforesaid, but has, after the issuance of a proclamation as authorized in subdivision (a) of this section, maintained or increased its said discriminations against the commerce of the United States.

While an outright ban on imports from Canada seems impossible, the legal authority to do so may portend spiraling duties and other restrictions under the rubric of Section 338. The attorneys at Barnes, Richardson & Colburn, LLP will remain abreast of these developments. Contact any attorney at the firm if you have any questions.