Trade measures between the United States and Canada have escalated significantly, and importers with Canadian-origin goods should be reviewing their upcoming shipments carefully.

Following the implementation of additional tariffs under Section 338 of the Tariff Act of 1930, the United States has now announced import bans on certain Canadian products, including specified dairy products, alcoholic beverages, motor vehicles, and other goods covered by the applicable proclamations.

The new import restrictions take effect September 29, 2026.

For companies importing from Canada, the distinction is significant: for certain affected products, this is no longer simply a question of paying a higher tariff. Covered merchandise imported on or after the effective date may be prohibited from entering the United States altogether.

How We Got Here

On July 20, 2026, the United States announced additional 50% tariffs on specified Canadian goods under Section 338. The measures were connected to U.S. concerns regarding Canadian treatment of U.S. exports involving alcoholic beverages, dairy products, and motor vehicles.

After a brief three-day suspension, those additional duties became effective at 12:01 a.m. ET on August 22, 2026.

The affected merchandise extends beyond the three industries at the center of the dispute. Depending on the applicable proclamation and HTS classification, Section 338 measures have reached products across a variety of categories.

Importers should therefore avoid assuming that a shipment is unaffected simply because it does not appear to be a traditional dairy, alcohol, or automotive import. The applicable HTS provisions and current annexes should be reviewed shipment by shipment.

Canada Responds With Counter-Tariffs

Canada responded with its own countermeasures effective September 8, 2026.

According to Canada’s Department of Finance, the counter-tariffs apply at rates of 15%, 25%, or 50% to approximately $27.6 billion in U.S. imports, with individual rates intended to correspond to the U.S. measures.

Canada’s measures are concentrated in sectors including:

• Steel and aluminum
• Dairy products
• Appliances
• Agricultural equipment
• Pulp and paper
• Plastics
• Electronics

Canada also increased certain existing counter-tariffs as part of its response.

September 29: Certain Tariffs Become Import Bans

The most significant development for U.S. importers takes effect September 29, 2026.

On September 8, the President signed proclamations under Section 338 excluding certain Canadian products from importation into the United States. The measures affect specified products associated with Canadian dairy, alcoholic beverages, and motor vehicles, as identified in the respective proclamation annexes.

Beginning at 12:01 a.m. Eastern Time on September 29, covered merchandise imported into the United States is subject to the new exclusion rather than merely an additional 50% tariff.

That distinction is important.

A tariff increases the cost of importing a product. An import ban can prevent the covered product from being imported at all.

What About Cargo Already in Transit?

Importers with shipments currently moving from Canada should pay particularly close attention to the transition rules.

The proclamations provide that merchandise subject to the new bans that was imported before September 29 but had not yet been entered for consumption or withdrawn from warehouse for consumption will remain subject to the existing 50% Section 338 duty, rather than becoming subject to the new import ban.

This makes the shipment’s timing and customs status especially important.

Companies should review:

• Expected U.S. arrival dates
• HTS classifications
• Country of origin
• Entry status
• Warehouse status
• Whether the specific HTS provision appears in an applicable Section 338 annex
• Whether additional Section 232 duties also apply

Do not rely solely on a purchase order description or general product category when determining whether the restrictions apply.

USMCA Does Not Automatically Provide an Exemption

Another critical point for importers is the relationship between Section 338 and the United States-Mexico-Canada Agreement (USMCA).

According to the White House, the Section 338 tariffs apply to covered merchandise regardless of whether the goods qualify as originating under USMCA.

In other words, making a valid USMCA preference claim does not, by itself, remove an applicable Section 338 measure.

Importers accustomed to relying on USMCA duty treatment should therefore review Section 338 exposure separately.

Section 338 and Section 232 May Stack

The September modifications also specify that applicable Section 338 duties can apply in addition to duties imposed under Section 232 of the Trade Expansion Act of 1962.

This means classification and landed-cost calculations require particular attention when merchandise falls within multiple trade-remedy programs.

An incorrect HTS classification could affect not only the ordinary duty rate but also whether a shipment is subject to an additional tariff, overlapping Section 232 duties, or an import restriction.

What Importers Should Do Now

With the September 29 effective date approaching, companies importing goods from Canada should review their pipeline immediately.

Importers should consider:

Reviewing Canadian shipments already in transit.
Identify potentially affected cargo and determine whether it is expected to be imported before or after September 29.

Auditing HTS classifications.
Section 338 treatment is tied to specific tariff classifications. Small classification differences can have substantial consequences.

Confirming country of origin.
Shipping from Canada and being Canadian-origin are not necessarily the same thing. Origin determinations should be reviewed separately from routing.

Checking USMCA assumptions.
Do not assume USMCA qualification means Section 338 does not apply.

Reviewing Section 232 exposure.
Certain Section 338 duties may apply in addition to existing Section 232 measures.

Recalculating landed costs.
Companies importing affected merchandise should evaluate the financial impact before goods are purchased or shipped.

Reviewing future purchase orders.
Importers may need to reconsider sourcing, shipment timing, supplier terms, and product classifications while the measures remain in effect.

September 29 Is an Important Deadline for Canadian Imports

The U.S.–Canada trade environment has changed rapidly over the past several months, moving from additional tariffs to Canadian countermeasures and now to targeted U.S. import bans.

For importers, the practical issue is determining exactly which products are covered and when they are considered imported under the applicable rules.

Companies with Canadian-origin dairy products, alcoholic beverages, motor vehicles, or other merchandise potentially covered by the Section 338 actions should review their classifications and shipment schedules before the September 29, 2026 effective date.

Need Help Reviewing Your Canadian Imports?

Earth Services can help importers review HTS classifications, duty exposure, USMCA treatment, Section 232 considerations, and upcoming Canadian-origin shipments.

If you are unsure whether an upcoming shipment is affected by Section 338—or whether the September 29 import restrictions apply to your products—contact our team before the cargo moves.

With trade measures changing quickly, reviewing your classification and landed-cost exposure before shipment can help avoid unexpected duties, delays, or prohibited-entry issues.

This information is provided for general informational purposes and reflects measures announced as of September 22, 2026. Trade rules, tariff classifications, exclusions, and implementation guidance may change. Importers should review the applicable Presidential Proclamations, HTSUS provisions, and current CBP guidance for individual transactions.