Canada's 50% Section 338 tariff list changes today, and a first court challenge is filed

A revised list of Canadian goods subject to a 50% U.S. duty took effect at 12:01 a.m. Eastern on Friday, October 30. For carriers and brokers moving freight across the northern border, the change means some loads will carry a different duty bill than they did a day ago.

What changed

According to the Baker McKenzie Global Import Blog, the October 23 proclamation adjusts the products covered by the Section 338 duties first imposed on Canada in August. Items such as carpets and rugs, paints, soaps, lubricants, cocoa powder, vinyl flooring and chest freezers were added. Certain plywood sheets, some paper products, packing crates and boxes, and some machinery were removed. The firm says the net effect is a broader list.

Hashtag Investing, citing the proclamation, counts 100 tariff classifications added and 22 removed, and says CBP issued implementing instructions on October 29. It also reports that the duty stacks on top of Section 232 duties where both apply, and that USMCA origin does not exempt a covered good.

The duty applies based on the date goods are entered for consumption or withdrawn from a bonded warehouse, not the date they shipped or the date of the sales contract. Baker McKenzie advises importers to re-screen their Canadian tariff lines. A load that left a Canadian plant last week could be treated differently at the bridge today.

C.H. Robinson noted in an August 22 advisory that the Section 338 duties have no set end date.

A first court challenge

Baker McKenzie also reports that *Gellert Global Group Corp. v. Trump*, filed at the U.S. Court of International Trade this week, is the first direct challenge to the Section 338 tariffs. The importer asks the court to declare the duties unlawful, block their collection, order refunds with interest and certify a class of affected importers. No ruling has been reported, and the duties remain in force while the case proceeds.

What it means for carriers

Duty is the importer's cost, not the carrier's, but the paperwork is where it hits trucks. Customs brokers working from the old product lists may file the wrong classification or duty treatment, and corrections can hold a load at the border. Ask brokers and shippers for the final entry documents before a Canadian pickup, and confirm who pays for detention if a shipment stalls.

Volume is the other question. Higher duties can push buyers to pause orders of the newly covered goods, which could thin out some northbound-to-southbound lanes. None of the sources reviewed here put a number on that effect, so treat it as something to watch in your own load counts.

What shippers and brokers should watch

- Re-screen every Canadian-origin tariff line against the proclamation annexes, which Baker McKenzie describes as the authoritative lists.
- Check entry dates on in-transit goods, since timing decides which rule applies.
- Ask customs counsel whether duty drawback or other relief applies to your products.
- Track the Court of International Trade case for any ruling on refunds.