If you bring goods in from Canada, the tariff list you checked in the summer is probably out of date. The U.S. has revised which Canadian products face its 50% Section 338 duty twice since the duty took effect in August, most recently on October 30, 2026. For a shipper, that changes two things: what a load really costs once it clears the border, and how much the timing of each truck now matters.
This guide explains what Section 338 is, what changed on October 30, why USMCA paperwork doesn't protect you from it, and what to sort out with your customs broker and freight partner before the next load crosses. It's written from the freight side, so it covers the trucking and timing questions as much as the duty itself.
Short answer: Section 338 is a 1930 trade law the U.S. used for the first time in 2026 to put an extra 50% duty on a list of Canadian products. The list took effect August 22 and was revised again on October 30, adding about 100 product codes (carpets, paints, chest freezers, valves and more) and dropping 22 (some plywood, boxes and packing machinery). The duty applies even when goods qualify under USMCA, and it stacks on top of Section 232 duties. Check every Canadian product's tariff code against the current list before you book the truck.
This is general information, not customs or legal advice. Classification decisions belong with a licensed customs broker.
What is the Section 338 tariff?
Section 338 of the Tariff Act of 1930 lets the President add duties of up to 50% on imports from a country that discriminates against U.S. commerce. It had never been used until July 20, 2026, when three proclamations put a 50% additional duty on Canadian products in response to Canadian measures on alcoholic beverages, dairy and motor vehicles. The duties took effect at 12:01 a.m. Eastern on August 22, 2026, covering roughly $20 billion of Canadian goods.
Don't let the names fool you. The "motor vehicles" list is the biggest of the three and covers far more than cars: furniture, textiles, honey, sporting goods, paper and wood products and much more. As trade analysts at Thomson Reuters put it, the proclamation titles describe the Canadian practice being targeted, not the goods being taxed. The only way to know is to check your products' tariff codes against the list.
What changed on October 30, 2026
An October 23 proclamation revised the list for goods entered (or withdrawn from a warehouse) on or after 12:01 a.m. Eastern on October 30 (White House fact sheet).
| Change | Examples | What it means for freight |
|---|---|---|
| Removed (22 tariff lines) | Certain thin plywood sheets, corrugated cartons and paper sacks, molded pulp, plastic film and bags, some refrigeration, packing and produce-sorting machinery | Lower landed cost on these loads from October 30 on; make sure your customs broker stops claiming the duty |
| Added (about 100 tariff lines) | Carpets and floor coverings, paints and varnishes, soaps and shampoos, lubricants, fiberboard and wood panels, window air conditioners, chest freezers, power tools, certain valves | A 50% duty on top of normal duties; budget for it before booking, not after the invoice arrives |
The authoritative list is in Annex I of the proclamation, and CBP published a modified HTS list for filers. Several law firms counted the changes slightly differently, so check at the full 10-digit code level rather than relying on summaries.
Why your USMCA certificate doesn't help here
This is the part that catches people. Normally, goods that qualify as originating under USMCA come into the U.S. duty-free, and a proper certification of origin is your proof. Section 338 duties don't work that way. The White House fact sheet states that they apply to covered goods whether or not the goods originate under USMCA.
They also stack. Under the current proclamation, Section 338 duties apply in addition to any Section 232 duties (the national-security tariffs on steel, aluminum and other products). Flexport gave a good example: a chest freezer entered through October 29 owed only the Section 232 steel duty, and from October 30 it owes the 50% Section 338 duty on top.
One piece of better news: unlike many trade remedy duties, Section 338 duties are eligible for drawback, so if you later export or destroy covered goods, ask your customs broker whether you can recover some of what you paid.
What this means for your cross-border freight
The duty is a customs question, but it lands on logistics decisions every day.
Timing decides the duty. The rate that applies depends on when the goods are entered for consumption, not when you placed the order or when the truck left the plant. A load of a newly covered product that crossed on October 29 and one that crossed on October 30 got very different bills. When the list changes again, loads that are in transit or sitting in a bonded warehouse on the change date are the ones to watch.
Delays now cost more than time. A truck held at the border for a document problem might push an entry past a change date. Clean paperwork matters more than ever: an accurate commercial invoice with correct tariff codes and country of origin, and the advance filings done on time. For U.S.-bound trucks, the carrier's electronic manifest must reach CBP at least one hour before arrival at the port (30 minutes for FAST shipments) under 19 CFR 123.92.
Border capacity is still tight. TRAFFIX's November NAX Index put the U.S.-Canada corridor at 54, above the 50 line that signals tougher-than-normal conditions for shippers, with capacity the most pressured factor (TRAFFIX via EIN Presswire). Add peak season and higher diesel, and late bookings get expensive. Our guide to what the CDL crackdown means for your freight costs covers why truck capacity is thin across the U.S. right now.
Volumes may shift. Some importers are pulling shipments forward before expected changes or pausing orders on newly covered goods. If your Canadian supplier changes its shipping pattern, your lane volumes and truck needs change with it, so tell your freight partner early.
U.S. exporters: Canada's tariffs go the other way
If you ship into Canada, you're dealing with Canada's side of the dispute. Canada announced dollar-for-dollar retaliatory tariffs of up to 50% on about $20 billion of U.S. goods, covering more than 700 product categories, effective September 8, 2026. Those include steel, dairy, fish, kitchen appliances, clothing, tools and farm equipment. Your Canadian customer, or their customs broker, will be checking codes against the Canadian Customs Tariff, so expect questions on classification and origin before they commit to orders.
A checklist before your next load crosses
Check every product code. Compare each Canadian-origin product's 10-digit HTS code against the current Section 338 list, including the October 30 changes.
Recalculate landed cost. Add the 50% duty for covered goods on top of normal duties and any Section 232 duty, then check your margins.
Watch entry dates. For goods in transit or in a bonded warehouse when a list changes, know which side of the effective date the entry will fall on.
Tighten the paperwork. Accurate commercial invoices, correct origin, and advance filings on time help keep trucks from sitting at the border.
Ask about drawback. If you export or destroy covered goods, drawback may recover part of the duty.
Book capacity early. U.S.-Canada capacity is tight going into the holidays; tender loads a few days earlier than usual.
Keep watching. The list has been revised twice in its first ten weeks, a 50% tariff on Canadian vehicles, parts and steel was announced for January 1, 2027, and the first court challenge to the Section 338 duties is underway. Check the list again before any large order.
How we handle cross-border loads
We arrange truckload and LTL freight between the U.S. and Canada and work alongside your customs broker so the freight side, from booking and carrier vetting to border timing and delivery, doesn't add to the duty headache. If you want a second set of eyes on your Canadian lanes before year-end, see our cross-border freight service, read our overview of US-Mexico and US-Canada freight lanes, or request a quote.
Frequently asked questions
What is Section 338 of the Tariff Act of 1930?
It's a provision that lets the President impose additional duties of up to 50% on imports from a country found to discriminate against U.S. commerce. It was used for the first time in July 2026, against Canada.
Do Section 338 tariffs apply to USMCA-qualifying goods?
Yes. The duties apply to covered Canadian goods whether or not they qualify as originating under USMCA, so a certification of origin doesn't remove them.
What products were added to the Section 338 list on October 30, 2026?
About 100 tariff lines, including carpets and floor coverings, paints, soaps and shampoos, lubricants, wood panels and fiberboard, window air conditioners, chest freezers, certain power tools and valves. About 22 lines were removed, including some plywood, cartons and boxes, and packing machinery.
Do Section 338 duties stack with Section 232 tariffs?
Under the current proclamation, yes. Covered goods pay the Section 338 duty in addition to any Section 232 duty.
Can Section 338 duties be refunded?
They are eligible for duty drawback, which can recover duties on goods that are later exported or destroyed. Talk to a licensed customs broker about whether your goods qualify.
Cover photo: Matt Barnard on Pexels.
