U.S. duties are added together, each as a percentage of the customs value. Since September 15, 2026 the 50% Section 338 duty stacks on Section 232, so some USMCA goods now pay 75% to 100%.
The formula
Total extra duty = regular duty + Section 301 (if not USMCA and not exempt) + Section 232 (if covered) + Section 338 (if listed), plus any antidumping or countervailing duty. Each is a percentage of the U.S. customs value, which is normally the price paid without international freight and insurance.
| Layer | Rate for Canada | Does USMCA help? |
|---|---|---|
| Regular duty | Varies by code | Yes, usually duty free |
| Section 301 forced labour tariff (from Jul 24, 2026) | 10%, some products exempt | Yes, USMCA goods are exempt |
| Section 232 steel, aluminum, copper | Up to 50%, by product | Partly |
| Section 232 vehicles and parts | 25% | Partly, U.S. content deducted |
| Section 232 softwood lumber / upholstered wood, cabinets | 10% / 25% | No |
| Section 338 (from Aug 22, 2026) | 50% | No |
Three worked examples, US$100,000 shipment
| Product | Section 301 | Section 232 | Section 338 | Total |
|---|---|---|---|---|
| Upholstered wooden sofa, USMCA (9401.61.20) | 0 | 25,000 | 50,000 | 75,000 |
| Aluminum profile, USMCA (7604.29) | 0 | 50,000 | 50,000 | 100,000 |
| Wooden dining table, not USMCA (9403.60.80) | 10,000 | 0 | 50,000 | 60,000 |
The sofa paid 25% before September 15, when Section 338 started stacking on Section 232 for the vehicles and alcohol baskets. On January 1, 2027 the Section 232 rate on upholstered wood products rises to 30%.
Legal ways to pay less
- U.S. goods returned unchanged under Chapter 98 don't pay Section 338.
- Repairs under 9802.00.40 or 9802.00.50 pay only on the value of the repair.
- U.S. components: under 9802.00.80 the duty applies to the value of the assembled article less the U.S. parts.
- Drawback: CBP confirms Section 338 duty is eligible. Goods exported again can recover up to 99%.
- Valuation: show freight and insurance separately; consider first sale valuation in multi tier deals.
- Foreign trade zones: goods exported again from a zone pay no U.S. duty.
Add up the layers for your code
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Questions
Does Section 338 stack on Section 232?
Yes, for the vehicles and alcohol baskets since September 15, 2026. Only the dairy basket keeps the Section 232 carve out.
Does USMCA remove the Section 301 tariff?
Yes. Canadian goods that qualify under USMCA are exempt from the 10% Section 301 forced labour tariff, but not from Section 338.
Is Section 338 duty eligible for drawback?
Yes. CBP's guidance says the additional Section 338 duty is eligible for drawback.
Sources
- U.S. tariff schedule 2026 Revision 21, Chapter 99, U.S. note 51
- CBP CSMS #69606660: Section 338 additional duties on certain goods of Canada
- EY: CBP guidance on Section 338 (Aug 25, 2026)
- PwC Canada: US escalates trade measures (Sep 17, 2026)
- PwC Canada: Section 301 tariffs (Aug 2026)
- Wiley: tariff tracker (updated Sep 14, 2026)
- Global Trade Alert: the Section 338 September package
This guide is general information, not legal or customs advice. Confirm your product code, origin and duty with a licensed customs broker before you act.