Section 338 Tariffs Shift Again: What Canadian Exporters Need to Know Before October 30
If you ship Canadian goods into the United States, the list of products facing a 50% Section 338 duty is changing again on October 30, 2026. It is the third version of that list in three months.
On October 23, the White House signed a proclamation that pulls 22 tariff lines off the list and adds roughly 100 new ones. Don’t let the title fool you: the action is formally tied to Canada’s motor vehicle tariffs, but the new list reaches carpets, cocoa powder, paint, valves, canoes and lab instruments.
Our advice at Dominion is simple. If you sell into the U.S., check your tariff classifications against the new list this week, not after your first entry lands.
What happened
The new proclamation amends Proclamation 11048, the July action that imposed 50% duties under Section 338 of the U.S. Tariff Act of 1930. The administration says the duties offset Canada’s motor vehicle tariff scheme, which it treats as discrimination against U.S. commerce. It also cites Canada’s retaliatory tariffs on about $20 billion of U.S. exports.
Section 338 lets the President amend these measures whenever he finds the public interest requires it. That is why the product list keeps moving.
| Date | Action | What it did |
|---|---|---|
| Oct 23, 2026 | Further scope modification | Removes 22 lines, adds about 100; effective Oct 30 |
| Sept 29, 2026 | Import bans take effect | Certain Canadian motor vehicle products barred from entry |
| Sept 8, 2026 | Proclamation 11065 | First scope change (furniture, lamps, golf carts, motorboats in; rock salt, cement out); effective Sept 15 |
| Aug 22, 2026 | Suspension lapses | 50% duties take full effect |
| Aug 18, 2026 | Proclamation 11056 | Three-day suspension while talks continued |
| July 20, 2026 | Proclamation 11048 | 50% duties imposed on selected Canadian goods |
The changes apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern on October 30, 2026.
Coming off the list
Annex I, Part A removes the 50% duty from 22 HTSUS lines, mostly packaging, paper and food-processing equipment. If you ship any of these, your costs should drop for entries on or after October 30.
| Product group | HTSUS subheadings |
|---|---|
| Seaweed and algae for human consumption | 1212.21.00 |
| Plastic film, boxes, cases, sacks and bags | 3920.20.00, 3923.10.90, 3923.21.00 |
| Specified plywood | 4412.33.06, 4412.33.26, 4412.33.32, 4412.33.57, 4412.34.26, 4412.34.32, 4412.34.57 |
| Plastic-coated paper and paperboard | 4811.51.20, 4811.51.40 |
| Paper packaging and articles | 4819.10.00, 4819.40.00, 4823.70.00, 4823.90.10 |
| Refrigerating and temperature-treatment equipment | 8418.69.01, 8419.89.95 |
| Filling, packing, wrapping and produce-sorting machinery | 8422.30.91, 8422.40.91, 8433.60.00 |
Only the Section 338 duty comes off. Normal duties, Section 232 duties and any other trade measures still apply.
Going on the list
Annex I, Part B adds the 50% duty to roughly 100 lines. Carpets and textile floor coverings alone account for more than 40 of them.
| Product group | HTSUS headings affected |
|---|---|
| Carpets and textile floor coverings (wool, cotton, synthetic, felt and more) | 5701, 5702, 5703, 5704, 5705 |
| Sweetened cocoa powder | 1806.10 (13 lines) |
| Paints, varnishes, mastics, shampoos, soap, surfactants, lubricants, waxes | 3208, 3214, 3305, 3401, 3402, 3403, 3404 |
| Diagnostic reagents, reference materials, chemical industry waste | 3822, 3825 |
| Plastics, polymers, vinyl flooring, boat parts, rubber floor coverings | 3907, 3909, 3918, 3926, 4016 |
| Wood products: MDF, fibreboard, flooring, joinery, packing boxes, coffins | 4409, 4411, 4415, 4418, 4421 |
| Paper, kraft paper, labels, sacks, bags and packaging | 4802, 4804, 4807, 4811, 4819, 4821 |
| Air conditioners, chest freezers, hand tools, valves | 8415, 8418, 8467, 8481 |
| Canoes, electro-surgical instruments, demonstration instruments, spectrometers, archery equipment | 8903, 9018, 9023, 9027, 9506 |
Civil aircraft and aircraft parts that meet HTSUS General Note 6 are excluded from the new duty.
Notice the swap inside some groups. Certain paper packaging (4819.10, 4819.40) comes off, while other paper packaging (4819.30) goes on. Two products in the same family can now land on opposite sides of the line, which is why classification at the full U.S. subheading matters.
What hasn’t changed
The rules of the game are the same; only the list moved.
- The rate is still 50% ad valorem on every covered line.
- CUSMA origin is no shield. The duty applies whether or not the goods qualify under CUSMA (USMCA). A valid certification of origin will not take you out of scope.
- It stacks. Section 338 duties apply on top of any Section 232 duties, so steel, aluminum or auto content can carry both.
- The HTSUS number governs, not the description. The Annex product descriptions are informational. Scope is set by the U.S. subheading the goods are actually classified under.
What this means for Canadian exporters
The biggest risk right now isn’t the 50% rate. It’s assuming a list you checked in September still applies in November.
“Motor vehicles” is a label, not a boundary. The proclamation’s title points to autos, but the product list is built to offset a burden on U.S. commerce, not to target the auto sector. A flooring manufacturer, a paint maker or a medical device supplier can be in scope without touching a single vehicle part.
Your Canadian HS code is only the starting point. Canada and the U.S. share the first six digits of the Harmonized System. The Section 338 list is drawn at the eight-digit U.S. level, where the two tariffs diverge. A product that looks safe at six digits can still be caught.
Your terms of sale decide who pays. The U.S. importer of record owes the duty. If you sell DDP or act as a non-resident importer, that 50% is your cost. If your customer imports, expect the conversation about price, sourcing or volume to come quickly.
Expect more changes. Three versions in three months suggests the list will keep moving while the two countries negotiate. Build a process to recheck exposure each time a proclamation drops, rather than treating each one as a one-off.
Your checklist before October 30
- Pull every product you ship to the U.S. and its U.S. HTSUS classification, not just your Canadian HS code.
- Match those subheadings against Annex I, both Part A (removals) and Part B (additions).
- Flag shipments that will enter after 12:01 a.m. ET on October 30. Goods in a U.S. bonded warehouse count by withdrawal date.
- Recalculate landed cost for anything newly in scope, including any Section 232 duty that stacks on top.
- Talk to your U.S. customers and broker so entry instructions, pricing and product master data are updated before the effective date.
- Revisit your terms of sale if you ship DDP or import as a non-resident.
- Keep watching for U.S. Customs and Border Protection implementation guidance and any further proclamations.
How Dominion can help
Since 1981, Dominion Customs Solutions has helped Canadian businesses stay ahead of trade rules that change faster than their supply chains can. When a list like this moves, we can:
- Map your exposure by matching your product catalogue against every Section 338 list, current and past.
- Confirm classifications at the full U.S. subheading, where in-or-out decisions are actually made.
- Model the cost of stacked Section 338 and Section 232 duties on your landed price.
- Coordinate with your U.S. customers and brokers so nothing gets caught at the border on October 30.
Not sure whether your products are on the new list? Contact our trade compliance team for a review before the change takes effect.
This article is for general information only and is not legal advice. Confirm classifications and duty treatment against the official Annex and current U.S. Customs guidance before acting.