U.S. expands and reshuffles 50% Section 338 tariffs on Canadian goods, adding cheeses, fats, hides, furs, boats and revising alcohol coverage.

1. What changed

The President issued a proclamation modifying the scope of Canadian-origin products subject to additional ad valorem duties of 50% under section 338 of the Tariff Act of 1930, originally imposed by Proclamation 11046. The action:

• Adds numerous HTSUS subheadings (primarily cheeses, certain fats and oils, hides, furs, and motorboats) to the list of Canadian products subject to a 50% additional duty.
• Removes two Canadian bulk alcohol subheadings from Section 338 coverage.
• Updates HTSUS Chapter 99, subchapter III, U.S. note 51 and changes the applicable Chapter 99 reference from 9903.03.12 to 9903.03.13.
• Confirms these Section 338 duties apply in addition to any Section 232 duties.

2. Affected products and HTS codes

A. New products now covered by 50% Section 338 duty (Annex I, Part A; also listed in Annex II)

Unless qualifying as civil aircraft/parts under HTSUS General Note 6, the following Canadian-origin products are now subject to an additional 50% ad valorem duty:

Cheeses and cheese substitutes (Chapter 4):

• 0406.10.64 – Swiss or Emmentaler cheese without an eye formation, Gruyere-process cheese, and related cheeses and cheese substitutes, described in additional U.S. note 22 to chapter 4.
• 0406.10.84 – Other fresh cheese and substitutes for cheese containing cow’s milk, nesoi, described in additional U.S. note 16 to chapter 4.
• 0406.10.88 – Other fresh cheese and substitutes for cheese containing cow’s milk, nesoi, not described in additional U.S. note 16 to chapter 4.
• 0406.10.95 – Other fresh cheese and substitutes for cheese, nesoi.
• 0406.20.33 – Cheddar cheese, grated or powdered, not described in general note 15 or additional U.S. note 18 to chapter 4.
• 0406.20.53 – Grated or powdered Romano, Reggiano, Parmesan, Provolone, Provoletti, Sbrinz and Goya cheeses, made from cow's milk, not described in additional U.S. note 21 to chapter 4.
• 0406.30.81 – Cheese processed from Swiss, Emmentaler or Gruyere-process cheeses, described in additional U.S. note 22 to chapter 4.
• 0406.30.91 – Other processed cheese made from cow’s milk, nesoi, not grated or powdered, not described by additional U.S. note 16 to chapter 4.
• 0406.30.95 – Other processed cheese (including mixtures) not made from cow’s milk, nesoi, not grated or powdered.
• 0406.40.40 – Roquefort cheese, other than in original loaves, not grated, powdered or processed.
• 0406.40.54 – Other blue-veined cheese in original loaves, nesoi, described in additional U.S. note 17 to chapter 4.
• 0406.40.70 – Other blue-veined cheese, nesoi, not described in general U.S. note 15 or in additional U.S. note 17 to chapter 4.
• 0406.90.08 – Other cheddar cheese, nesoi, described in additional U.S. note 18 to chapter 4.
• 0406.90.12 – Other cheddar cheese, nesoi, not described in general U.S. note 15 or in additional U.S. note 18 to chapter 4.
• 0406.90.18 – Edam and Gouda cheese, nesoi, not described in general U.S. note 15 or in additional U.S. note 20 to chapter 4.
• 0406.90.42 – Other Romano, Reggiano, Parmesan, Provolone and Provoletti cheese made from cow’s milk, nesoi, not described in general U.S. note 15 or in U.S. note 21 to chapter 4.
• 0406.90.48 – Other Swiss or Emmentaler cheese with an eye formation, nesoi, not described in general U.S. note 15 or in additional U.S. note 25 to chapter 4.
• 0406.90.56 – Other cheeses, nesoi, from sheep's milk in original loaves and suitable for grating.
• 0406.90.59 – Other cheeses and substitutes for cheese (including mixtures of cheeses), nesoi, made from sheep's milk.
• 0406.90.78 – Cheeses and substitutes for cheese (including mixtures of cheeses) made from cheddar cheese, described in additional U.S. note 18 to chapter 4.
• 0406.90.88 – Cheeses and substitutes for cheese (including mixtures of cheeses) made from Edam or Gouda cheese, not described in general U.S. note 15 or in additional U.S. note 20 to chapter 4.
• 0406.90.95 – Other cheeses and substitutes for cheese (including mixtures of cheeses) made with cow’s milk, described in additional U.S. note 16 of chapter 4.
• 0406.90.97 – Other cheeses and substitutes for cheese (including mixtures of cheeses) made with cow’s milk, not described in additional U.S. note 16 of chapter 4.

Fats and oils (Chapter 15):

• 1518.00.40 – Other oxidized, dehydrated or otherwise chemically modified animal, vegetable or microbial fats and oils, nesoi; inedible mixtures of animal, vegetable or microbial fats and oils, nesoi.

Alcoholic beverages (Chapter 22) – newly added specific lines:

• 2208.30.6020 – Whiskies (specific subheading; description not fully repeated in text but listed in Annex II).
• 2208.30.6040 – Whiskies (specific subheading).
• 2208.30.6055 – Whiskies (specific subheading).
• 2208.30.6065 – Whiskies (specific subheading).
• 2208.30.6075 – Whiskies (specific subheading).
• 2208.70.0030 – Liqueurs and cordials (specific subheading).

Hides, leather, and furs (Chapters 41 and 43):

• 4101.50.10 – Whole raw hides and skins of bovine or equine animals, of a weight exceeding 16 kg, not pretanned.
• 4101.90.10 – Raw hides and skins (other than whole hides and skins) of bovine or equine animals, not pretanned.
• 4107.11.50 – Other full grain unsplit upholstery leather of bovines (other than of buffalo) and equines, without hair on, further prepared after tanning or crusting.
• 4301.60.60 – Whole raw furskins of fox (other than of silver, black or platinum fox).
• 4302.19.30 – Tanned or dressed whole furskins of beaver, chinchilla, ermine, lynx, raccoon, sable, fisher, fitch, leopard, marten, nutria, ocelot, otter and pony, not dyed or assembled.
• 4302.19.45 – Tanned or dressed whole furskins of beaver, chinchilla, ermine, lynx, raccoon, sable, wolf, fisher, fitch, leopard, marten, nutria, ocelot, otter and pony, dyed but not assembled.
• 4302.19.60 – Other tanned or dressed whole furskins, nesoi, not dyed or assembled.

Boats (Chapter 89):

• 8903.31.00 – Motorboats, other than inflatable or outboard motorboats, with a length not over 7.5 m.
• 8903.32.00 – Motorboats, other than inflatable or outboard motorboats, with a length over 7.5 m but not over 24 m.
• 8903.93.20 – Outboard motorboats, with a length not over 7.5 m.

B. Products no longer covered by 50% Section 338 duty (Annex I, Part B)

The following Canadian-origin products are removed from Section 338 coverage and will no longer be subject to the additional 50% duty:

• 2208.30.6085 – Whiskies, nesoi, in containers each holding over 4 liters.
• 2208.70.0060 – Liqueurs and cordials, in containers each holding over 4 liters.

C. HTSUS Chapter 99 / Note 51 changes (Annex II)

1) U.S. note 51(b)(1) to subchapter III of chapter 99 is modified:

• Deleted subheadings from the Section 338 list:
• 2208.30.60
• 2208.70.00
• Inserted subheadings into the Section 338 list (for Canadian-origin goods):
• 0406.10.64, 0406.10.84, 0406.10.88, 0406.10.95
• 0406.20.33, 0406.20.53, 0406.30.81, 0406.30.91
• 0406.30.95, 0406.40.40, 0406.40.54, 0406.40.70
• 0406.90.08, 0406.90.12, 0406.90.18, 0406.90.42
• 0406.90.48, 0406.90.56, 0406.90.59, 0406.90.78
• 0406.90.88, 0406.90.95, 0406.90.97
• 1518.00.40
• 2208.30.6020, 2208.30.6040, 2208.30.6055, 2208.30.6065, 2208.30.6075
• 2208.70.0030
• 4101.50.10, 4101.90.10, 4107.11.50
• 4301.60.60, 4302.19.30, 4302.19.45, 4302.19.60
• 8903.31.00, 8903.32.00, 8903.93.20

2) U.S. note 51(c) is modified:

• The reference “9903.03.12” is deleted and replaced with “9903.03.13”.

This indicates that the operative Chapter 99 subheading for declaring the Section 338 additional duty on these Canadian products is now 9903.03.13 (replacing 9903.03.12).

3. Rate changes

• Additional duty rate: 50% ad valorem.
• For all HTSUS subheadings listed in Annex I, Part A and added in Annex II to U.S. note 51(b)(1), Canadian-origin goods are now subject to an additional 50% ad valorem duty under section 338.
• For HTSUS 2208.30.6085 and 2208.70.0060 (bulk whisky and bulk liqueurs/cordials from Canada), the previous additional 50% ad valorem duty under section 338 is removed; these products revert to their normal MFN/other applicable rates (plus any other applicable trade remedies, if any, but no longer this specific 50% Section 338 duty).
• The proclamation confirms that these Section 338 duties are in addition to any Section 232 duties that may apply to the same goods.

4. Effective dates and duration

• Effective date: 12:01 a.m. eastern time on September 15, 2026.
• Applicability: Goods entered for consumption, or withdrawn from warehouse for consumption, on or after that time and date.
• Duration: The modifications remain in effect unless expressly suspended, revoked, supplemented, amended, or terminated by a subsequent action.

5. Required actions for importers, brokers, and compliance teams

A. Classification and origin review

• Confirm that all imports from Canada are correctly classified under the detailed HTSUS subheadings listed above, especially:
• Cheese and dairy products under 0406.
• Modified fats and oils under 1518.00.40.
• Alcoholic beverages under 2208.30 and 2208.70.
• Hides, leather, and furs under 4101, 4107, and 4301–4302.
• Motorboats under 8903.31.00, 8903.32.00, and 8903.93.20.
• Verify country of origin as Canada for purposes of Section 338; these additional duties apply only to products of Canada.

B. Entry filing and Chapter 99 usage

• For covered Canadian-origin products entered on or after 12:01 a.m. ET, September 15, 2026:
• Ensure the correct Chapter 99 subheading 9903.03.13 is declared (per revised U.S. note 51(c)) in addition to the underlying 8- or 10-digit HTSUS classification.
• Confirm that 9903.03.12 is no longer used for these Section 338 duties.
• For 2208.30.6085 and 2208.70.0060 of Canadian origin:
• Stop applying the 50% Section 338 additional duty for entries on or after the effective date.
• Ensure that only the base tariff rate and any other applicable remedies (if any) are applied.

C. Duty calculation and financial planning

• Update internal duty calculation tools and landed cost models to reflect:
• A 50% ad valorem surcharge on the customs value of all newly covered Canadian-origin HTS lines.
• Removal of the 50% surcharge on Canadian bulk whisky and bulk liqueurs/cordials under 2208.30.6085 and 2208.70.0060.
• Review existing contracts, purchase orders, and pricing with Canadian suppliers for affected products to account for the higher duty burden.

D. Systems and master data updates

• Update ERP, trade compliance, and broker systems to:
• Map the affected HTSUS codes to the new Chapter 99 subheading 9903.03.13 for Canadian-origin goods.
• Remove mapping of 2208.30.6085 and 2208.70.0060 to Section 338 additional duties for entries on or after September 15, 2026.
• Replace any references to 9903.03.12 with 9903.03.13 where applicable to this measure.

E. Post-entry review and corrections

• For entries on or after August 22, 2026 but before September 15, 2026, confirm that the prior Section 338 scope (as per Proclamation 11046 and 11056) was correctly applied.
• For entries on or after September 15, 2026:
• Conduct targeted audits of entries involving the listed HTS codes to ensure correct application or removal of the 50% duty.
• File Post Summary Corrections (PSCs) or protests where misapplication of the new scope is identified.

F. Coordination with brokers and suppliers

• Provide written instructions to customs brokers detailing:
• The list of HTS codes now subject to the 50% Section 338 duty for Canadian-origin goods.
• The removal of Section 338 duties for 2208.30.6085 and 2208.70.0060.
• The requirement to use 9903.03.13 instead of 9903.03.12.
• Inform Canadian suppliers of the increased duty burden on affected products and consider supply chain or sourcing adjustments where feasible.

6. References and source documents

• Proclamation: “Modifying the Scope of Products of Canada Subject to the Additional Duties Imposed to Offset Canadian Discrimination Against the Commerce of the United States With Respect to Alcoholic Beverages,” September 8, 2026 (White House).
• Annex I (product scope – additions and removals):
• https://www.whitehouse.gov/wp-content/uploads/2026/09/Alcohol-Scope-Modification-Annex-I.pdf
• Annex II (HTSUS and Chapter 99 modifications):
• https://www.whitehouse.gov/wp-content/uploads/2026/09/Alcohol-Scope-Modification-Annex-II.pdf

7. Key points for compliance teams

• A 50% ad valorem Section 338 duty now applies to a broad set of Canadian cheeses, certain fats and oils, hides, furs, and motorboats, plus specific whisky and liqueur subheadings, effective September 15, 2026.
• Bulk Canadian whisky and liqueurs/cordials in containers over 4 liters under 2208.30.6085 and 2208.70.0060 are removed from Section 338 coverage.
• Chapter 99 reference changes from 9903.03.12 to 9903.03.13; systems and broker instructions must be updated accordingly.
• These duties are cumulative with any applicable Section 232 duties, increasing total duty exposure on affected Canadian-origin imports.