Section 338 Canada: Alcohol and Vehicle Duties Now Stack on Section 232; Import Bans Start September 29

Two pairs of Section 338 proclamations changed Canada's retaliatory-duty treatment within three weeks of each other, both signed September 8 and published September 14, 2026. Proclamations 11064 (alcohol, 91 FR 58331, FR Doc. 2026-18838) and 11065 (motor-vehicle-grievance, 91 FR 58339, FR Doc. 2026-18839) took effect at 12:01 a.m. eastern time on September 15, 2026: each narrowed the annexes' Section 232 exclusion so that only the dairy duty (heading 9903.03.13) still excludes Section 232-covered goods, added dozens of lines to their own annexes — including two passenger-vehicle lines, 8703.10.50 and 8703.21.01 — and removed a handful of others (CBP CSMS #69851916). Proclamations 11061 (alcohol import ban, 91 FR 58311, FR Doc. 2026-18835), 11062 (dairy import ban, 91 FR 58319, FR Doc. 2026-18836) and 11063 (motorcycle import ban, 91 FR 58325, FR Doc. 2026-18837) take a further step: from 12:01 a.m. eastern time on September 29, 2026, goods on their annexes are excluded from importation into the United States rather than taxed. A shipment imported before that moment but not yet entered still owes the 50 percent Section 338 duty instead of being turned away (clause 2 of each proclamation), and the duty resumes for a given import if a court invalidates its ban (clause 9(b)).

Importers of Canadian wine and spirits — most of the 11061 annex is limited to packaged forms, so bulk shipments outside that limitation stay dutiable rather than banned — plus beer, whey, molasses and non-alcoholic beer under Proclamation 11062, and motorcycles over 800cc under Proclamation 11063, where the entire annex is one line. Also affected: importers of the two newly annexed passenger-vehicle lines and the other Canadian goods newly reached by Proclamations 11064 and 11065, who now pay Section 338 on top of Section 232 rather than the dairy-only exclusion that used to apply across all three original annexes.

Section 338 Canada: Alcohol and Vehicle Duties Now Stack on Section 232; Import Bans Start September 29 (effective 2026-09-15). Two pairs of Section 338 proclamations changed Canada's retaliatory-duty treatment within three weeks of each other, both signed September 8 and published September 14, 2026. Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338) lets the President impose additional duties on the goods of a country that discriminates against United States commerce. It had gone unused for decades before three proclamations, all signed July 20 and published July 23, 2026, each applied it to a separate annex of Canadian goods: Proclamation 11046 covering alcoholic beverages, 11047 covering dairy, and 11048 covering a broad basket spread thinly across roughly 60 HTS chapters. Each imposes an additional 50 percent ad valorem duty on the goods in its own annex. The three were originally proclaimed for August 19, 2026; Proclamation 11056 (91 FR 54789) delayed the start by three days, so the duties actually apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on August 22, 2026. The reach is narrow in two directions: it is Canada-only, and within Canada it touches only annexed goods. Through September 14, 2026, an article already subject to Section 232 duties was excluded entirely, stated by name in clause 2 of all three proclamations; from September 15, 2026 (Proclamations 11064 and 11065, CBP CSMS #69851916) that exclusion narrowed to the dairy duty alone, so the alcohol and motor-vehicle-grievance duties now stack on top of Section 232. Through September 14, 2026, passenger vehicles, light trucks, medium- and heavy-duty vehicles, buses and all of their parts stayed off every Section 338 annex under HTSUS U.S. note 51(c); Proclamation 11065 then added two passenger-vehicle lines, 8703.10.50 and 8703.21.01, to the motor-vehicle-grievance annex, so a Canadian vehicle classified under either line now pays its Section 232 duty and the Section 338 duty on top of it. The consequence that matters most for Canadian sourcing is that a USMCA preference claim does not defeat this duty. HTSUS U.S. note 51(a) subjects goods eligible for special tariff treatment under general note 3(c)(i) — the route a USMCA claim takes — to the additional rate regardless, and the Rates of Duty 1-Special subcolumn reads "The duty provided in the applicable subheading + 50%", identical to 1-General. A USMCA-qualifying Canadian good in scope keeps its 0 percent preferential underlying duty and still owes the additional 50 percent. Wine and spirits, HTS chapters 2203 through 2208, is the only product category this site prices under Section 338; from 12:01 a.m. eastern time on September 29, 2026 the wine and spirits on the Proclamation 11061 annex, mostly limited to packaged forms, cannot be imported into the United States at all. Importers of annexed Canadian goods should confirm their HTS line against the proclamation annexes and check whether the good is subject to Section 232 — for the alcohol and motor-vehicle-grievance annexes that no longer removes it from Section 338, only from the dairy annex does it still remove it entirely.

Canadian sourcing is the only exposure here: Section 338 reaches annexed Canadian goods and nothing else. The practical checks are (1) whether your HTS line appears in one of the three proclamation annexes — for this site's categories that means wine and spirits, HTS chapters 2203 through 2208 — (2) whether the good is also subject to Section 232 duties: through September 14, 2026 that excluded it entirely under clause 2 of every proclamation, but from September 15, 2026 it only still does for the dairy annex, and (3) whether you have been budgeting on a USMCA claim, because this is the one authority a USMCA preference claim does not defeat: a qualifying good keeps its 0 percent preferential underlying duty and still owes the additional 50 percent. Most Canadian passenger vehicles, light trucks and their parts stay off every Section 338 annex, but two specific lines, 8703.10.50 and 8703.21.01, were added from September 15, 2026 and now owe the duty on top of Section 232.

• Section 338 Explainer
• Canada — Wine & Spirits
• Canada — Motorcycles & ATVs
• HTS Lookup