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United States modifies scope of Section 338 duties on Canadian motor vehicles and parts

Date of publication: September 10, 2026.
On September 8, 2026, President Trump issued a proclamation revising the scope of Canadian-origin products subject to the additional 50% ad valorem duties imposed under Section 338 of the Tariff Act of 1930 in connection with the U.S.-Canada motor vehicle tariff dispute. The changes take effect for goods entered for consumption, or withdrawn from warehouse for consumption, on or after
12:01 a.m. eastern time on September 15, 2026.

Background

The Section 338 duties trace back to Proclamation 11048 (July 20, 2026), which found that Canada's motor vehicle tariff scheme discriminates against U.S. commerce and imposed additional duties effective August 19, 2026. A brief three-day suspension of those duties under Proclamation 11056 (August 18, 2026) lapsed on August 22, 2026 after Canada, according to the proclamation, did not follow through on a commitment to remove the underlying discriminatory measures, and the additional duties took full effect.

What changed

Rather than lifting the duties, the administration has narrowed and adjusted their product scope:
  • Additions
    : Certain Canadian-origin products listed in
    Annex I, Part A
     are newly brought within the scope of the 50% additional duty.
  • Removals
    : Certain Canadian-origin products listed in
    Annex I, Part B
     are removed from the scope of the 50% additional duty.
  • HTSUS conformance
    : The Harmonized Tariff Schedule of the United States is amended per
    Annex II
     to reflect these changes.
  • Stacking with Section 232
    : The Section 338 duties, as modified, continue to apply in addition to existing Section 232 duties on autos and auto parts.
The proclamation does not identify the specific tariff lines affected in its body text - importers and customs brokers should consult Annex I and Annex II directly to determine whether particular HTSUS classifications are newly captured or newly excluded.

Why it matters for importers

  • Landed cost recalculation
    : Companies importing Canadian motor vehicles or automotive parts should re-run classification and duty calculations against the updated annexes well before the September 15 effective date.
  • Supply chain exposure
    : Products moving from "in scope" to "out of scope" (or vice versa) may materially change cost competitiveness for cross-border automotive supply chains built around USMCA-adjacent flows.
  • Compounding duties
    : Because Section 338 duties stack on top of Section 232 duties, affected goods could face a cumulative and substantial tariff burden.
  • Volatility risk
    : This is the second modification in as many months following a lapsed suspension, underscoring that the scope and status of these duties remain fluid pending further U.S.-Canada negotiations.

Next steps

U.S. Customs and Border Protection, in consultation with Treasury, Commerce, and the U.S. Trade Representative, is authorized to issue implementing guidance and further technical corrections to the annexes via the Federal Register. Importers should:
  • Review Annex I and Annex II against current Canadian-origin import classifications.
  • Confirm entry timing relative to the September 15, 2026 effective date, including goods withdrawn from bonded warehouses.
  • Monitor Federal Register notices for further technical or ministerial corrections.
  • Track parallel proclamations affecting other Canadian sectors (alcoholic beverages, dairy), which are being adjusted on a similar timeline.
This alert is based on the White House proclamation dated September 8, 2026. It is provided for general informational purposes and does not constitute legal or customs advice. Companies with in-scope goods should consult qualified trade counsel to assess entry-specific impacts.