Section 338: a proposed US tariff on Canadian-origin goods
A proposed additional duty on certain Canadian-origin goods entering the US has been discussed as taking effect August 19, 2026. It has not been confirmed, but it's worth reviewing your HTS codes now.
Under the proposed Section 338 measures, certain goods of Canadian origin entering the United States could become subject to an additional duty of up to 50% ad valorem — on top of any other duties, tariffs, taxes, and fees that already apply. As of this writing, the measure has not been confirmed to take effect on the currently discussed date of August 19, 2026, and could still change or be delayed. We're publishing this as an early heads-up so you have time to review your products before any final rule lands.
What's being proposed
The measure reportedly covers hundreds of Harmonized Tariff Schedule (HTS) classifications, spanning categories such as apparel and textiles, plastics and housewares, jewelry, electronics, furniture, toys and sporting goods, and paper goods. That list is illustrative, not exhaustive — the authoritative classification list is maintained by the US International Trade Commission (USITC) and US Customs and Border Protection (CBP), not any third-party summary, so those are the sources to check against your own product catalog.
CUSMA/USMCA treatment
Based on how the measure has been described, CUSMA/USMCA preferential treatment would not exempt a covered Canadian-origin product from the additional Section 338 duty. If a product's HTS classification is covered and its country of origin is Canada, the additional duty could apply even if the product otherwise qualifies for CUSMA/USMCA treatment.
What we'd recommend doing now
- —Confirm the HTS classifications currently used for your US-bound shipments.
- —Check those classifications against the official USITC/CBP list once a final rule is published.
- —Confirm the country of origin recorded for each product.
- —Estimate the impact of an additional duty if the measure proceeds, and how you'd want to handle it in your pricing.
Where this stands today: Section 338 duties are not yet built into duty and tax estimates in ship. by Covantra, because the measure has not taken effect and no official rate schedule has been published. If it's confirmed, we'll update our customs and duty guidance and this page accordingly — for now, the most reliable planning step is checking your own HTS classifications against the official USITC/CBP list, or with a licensed customs broker.
For related cross-border and customs basics, see Canada Post cross-border services → For cost-side planning, see ways to reduce parcel shipping costs →
Frequently asked questions
- What is Section 338 and how could it affect shipments from Canada to the US?
- Section 338 refers to a proposed US tariff measure that would add a duty of up to 50% ad valorem on certain Canadian-origin goods entering the United States, on top of any duties, taxes, and fees that already apply. It has been discussed as taking effect August 19, 2026, but as of this writing it has not been confirmed. If it proceeds, hundreds of HTS classifications could be affected across categories including apparel and textiles, plastics and housewares, jewelry, electronics, furniture, toys, and paper goods.
- Does CUSMA/USMCA protect against the Section 338 tariff?
- Based on how the measure has been described, no. CUSMA/USMCA preferential treatment would not exempt a covered product from the additional Section 338 duty. If a product's HTS classification is on the affected list and its country of origin is Canada, the additional duty could apply even if the product otherwise qualifies for CUSMA/USMCA treatment.
- How do I find out if my product is affected by Section 338?
- Confirm the HTS classification and country of origin you currently use for your US-bound shipments, then check that classification against the official list maintained by the US International Trade Commission (USITC) or US Customs and Border Protection (CBP) — those are the authoritative sources, not any third-party summary. A licensed customs broker can help confirm classification if you are unsure.
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