Five proclamations turn part of the Section 338 tariff on Canada into an import ban
Five proclamations signed on 8 September alter the product lists in two of the three Section 338 baskets, make the 50% duty payable on top of Section 232 for those two from 15 September, and exclude 68 tariff entries…
Source: Global Trade Alert · September 21, 2026 at 12:03 AM · AI-assisted report
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UNITED STATES, 21 SEPTEMBER 2026 —
Five proclamations signed on 8 September 2026 alter the product lists in two of the three Section 338 baskets, make the 50 % duty payable on top of Section 232 duties for those baskets from 15 September, and exclude 68 tariff entries from importation altogether from 29 September.
Market Impact
Before the proclamations, the three baskets covered $20.19 billion of the $383.1 billion the United States imported from Canada in 2025, representing 5.3 % of total imports and spanning 554 product lines. From 15 September the coverage rises to $20.30 billion across 659 lines, and the trade‑weighted average applied US tariff on Canadian goods moves from 7.17 % on 14 September to 7.50 % on 15 September, using 2024 import weights.
The background shows that, prior to 8 September, goods in the eight Section 232 categories listed in US note 51(c) to Chapter 99 of the tariff schedule – steel, aluminium, copper, autos, trucks, lumber, pharmaceuticals and semiconductors – were exempt from the Section 338 surcharge. After the proclamations, that exemption survives only for the dairy basket, and the duties apply in addition to any Section 232 levies.
Trade paying the full 50 % rises from $14.52 billion to $16.66 billion because the Section 232 carve‑out that had sheltered $2.09 billion disappears. Of the trade now subject to the 50 % rate, $2.40 billion pays it on top of Section 232 duties. From 29 September up to $0.97 billion of 2025 imports may not be imported at all, reflecting the new bans.
The current development detail reveals that the motor‑vehicle basket gains 76 lines worth $1.48 billion of 2025 imports and loses five lines worth $874 million; three further lines are narrowed to sub‑categories (paper household and hospital articles retain only face masks, fishing tackle retains only rods, and electric control panels drop switchgear assemblies and switchboards, which represented 44 % of that line in 2025).
The alcohol basket gains 34 entirely different products, including 23 cheese lines, modified fats and oils valued at $272 million, hides and leather at $8 million, and motorboats at $73 million, while bulk whisky and bulk liqueurs above four litres are removed; bourbon and rye remain listed separately. The three exclusion proclamations name 68 annex entries – 53 alcohol, 14 dairy and one motorcycle line – of which 36 recorded Canadian imports in 2025.
Together they represent up to $0.97 billion of 2025 imports, or 0.25 % of Canada’s exports to the United States. Alcoholic beverages account for $0.85 billion of that value, whey, molasses and non‑alcoholic beer for $0.04 billion, and motorcycles over 800 cc for $0.08 billion.
Of the $0.97 billion, $0.84 billion is banned on the face of the annexes; the remaining $0.13 billion depends on the share of product moving in retail packaging, treated as an upper bound, with $79 million sitting on two lines whose tariff‑schedule text points the opposite way.
Sector and company specifics drawn from the source indicate that structural steel, aluminium and small vehicles newly added to the motor‑vehicle basket account for $1.09 billion of the $2.40 billion that pays the 50 % duty on top of Section 232.
Related: United States