CBP explains Section 338 duties on Canadian alcohol, dairy and vehicle goods
CBP title: GUIDANCE: Section 338 Additional Duties on Certain Goods of Canada
What did CBP announce?
CBP announced guidance implementing the July 20, 2026 proclamations that impose additional duties on certain Canadian goods, after a temporary suspension of those duties ended on August 22, 2026. For entries for consumption or withdrawn from warehouse on or after 12:01 a.m. that day, CBP applied a 50 percent additional duty under HTSUS headings 9903.03.12 through 9903.03.14, 0 percent under 9903.03.15, and separate treatment for civil aircraft goods under 9903.03.16. The message also covered Chapter 98 exceptions, foreign trade zone status, drawback eligibility, and the required order for reporting HTSUS numbers on entry summaries.
What is Allied's position?
At the time, this guidance told us how to classify and report duties on affected Canadian goods entered on or after August 22, 2026, including the entry summary line order for Chapter 98 and 99 numbers. Because this message is over a month old, later CSMS messages may have changed these rates or the goods covered. Clients importing Canadian alcoholic beverages, dairy, motor vehicles, or related parts should ask us to review how their current entries are classified and whether these duties still apply.
General information, not legal advice.
What does the CBP message say?
The purpose of this message is to provide guidance on the implementation of the July 20, 2026, Presidential Proclamations on Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Alcoholic Beverages, Dairy, and Motor Vehicles.
On August 18, 2026, the Executive Office of the President issued “Canada; Temporary Suspension of Additional Duties To Offset Discrimination Against U.S. Commerce With Respect to Alcoholic Beverages, Dairy, and Motor Vehicles (Proc. 11056) (https://www.federalregister.gov/public-inspection/2026-17294/canada-temporary-suspension-of-additional-duties-to-offset-discrimination-against-us-commerce-with)" to suspend additional duties of 50 percent on certain imported products of Canada, effective August 19, 2026 pursuant to Presidential Proclamations 11046, 11047, and 11048 until 12:01 a.m. eastern time on August 22, 2026.
GUIDANCE
This guidance provides instructions for importers, brokers, and filers on filing entries to U.S. Customs and Border Protection (CBP) on certain imports from Canada entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on August 22, 2026, as provided in the Harmonized Tariff Schedule of the United States (HTSUS) under headings 9903.03.12–9903.03.16.
See the attachment for the Chapter 1 to 97 HTSUS classifications, which correspond to each Chapter 99 heading. See 91 FR 46639 (https://www.federalregister.gov/documents/2026/07/23/2026-14991/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united), 91 FR 46653 (https://www.federalregister.gov/documents/2026/07/23/2026-14992/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united), and 91 FR 46663 (https://www.federalregister.gov/documents/2026/07/23/2026-14997/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united).
Effective with respect to goods from Canada entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on August 22, 2026:
9903.03.12: Articles the product of Canada as provided in subdivision (b)(1) of U.S. note 51
50% additional ad valorem rate of duty
9903.03.13: Articles the product of Canada as provided in subdivision (b)(2) of U.S. note 51
9903.03.14: Articles the product of Canada as provided in subdivision (b)(3) of U.S. note 51
9903.03.15: Articles of aluminum, of steel or of copper or derivative aluminum or steel articles; passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans) and light trucks; parts of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans) and light trucks; medium- and heavy duty vehicles; parts of medium- and heavy duty vehicles; wood products; semiconductor articles; and patented pharmaceutical articles, as provided in subdivision (c) of U.S. note 51
0% additional ad valorem rate of duty
9903.03.16: Articles of civil aircraft (all aircraft other than military aircraft and unmanned aircraft); their engines, parts and components; their other parts, components and subassemblies; and ground flight simulators and their parts and components the product of Canada, as provided for in subdivision (d) of U.S. note 51
Products that are provided for in headings 9903.03.12–9903.03.16 shall continue to be subject to antidumping, countervailing, or other duties, taxes, fees, exactions and charges that apply to such products, as well as to the additional ad valorem rate of duty imposed by this heading.
Chapter 98
The additional duty imposed by headings 9903.04.12 to 9903.04.14 shall not apply to goods for which entry is properly claimed under a provision of chapter 98 of the tariff schedule pursuant to applicable regulations of CBP, and whenever CBP agrees that entry under such a provision is appropriate, except for goods entered under subchapter XXIII of chapter 98 of the tariff schedule, subheadings 9802.00.40, 9802.00.50 and 9802.00.60, and heading 9802.00.80. For subheadings 9802.00.40, 9802.00.50 and 9802.00.60, the additional duty applies to the value of repairs, alterations or processing performed, as described in the applicable subheading. For heading 9802.00.80, the additional duty applies to the value of the article assembled abroad, less the cost or value of such products of the United States, as described.
Foreign Trade Zone Any product subject to the duties imposed in these Proclamations that is subject to the additional duty imposed by this action, and that is admitted into a U.S. foreign trade zone, except any product that is eligible for admission under “domestic status” as defined in 19 C.F.R. 146.43, only may be admitted as “privileged foreign status,” as defined in 19 C.F.R. 146.41, and will be subject upon entry for consumption to any ad valorem rate of duty related to the classification under the applicable HTSUS subheading.
Drawback
The additional duty imposed by headings 9903.04.12 to 9903.04.14 is subject to drawback.
HTSUS Sequence When submitting an entry summary in which a heading or subheading in Chapter 98 and/or 99 is claimed on imported merchandise, the following instructions will apply for the order of reporting the HTSUS on an entry summary line.
1. Chapter 98 (if applicable)
2. Chapter 99 number(s) for additional duties (if applicable)
3. For trade remedies,
- First report the Chapter 99 HTSUS for Section 301,
- Followed by the Chapter 99 HTSUS for Section 122,
- Followed by the Chapter 99 HTSUS for Section 232
- Followed by the Chapter 99 HTSUS for Section 201 duties (if applicable),
- Followed by the Chapter 99 HTSUS for Section 201 quota (if applicable).
4. Chapter 99 number(s) for REPLACEMENT duty or other use (i.e., Miscellaneous Tariff Bill or other provisions) 5. Chapter 99 number for other quota (not covered by #3) (if applicable) 6. Chapter 1 to 97 Commodity Tariff
The entered value of the imported product reported on the entry summary line should be reported on the Chapter 1-97 HTSUS classification, unless Chapter 98 reporting provisions require the entered value to be reported differently.
For questions regarding Section 338 entry filing, contact the Trade Remedy Branch at TradeRemedy@cbp.dhs.gov (mailto:TradeRemedy@cbp.dhs.gov).
If you encounter any errors in filing an entry summary, contact your CBP client representative or the ACE Help Desk.
- Section 338 Canada HTS LIST Final.pdf