Canada tariffs · checked 7 November 2026

The Section 338 tariff lawsuit: what it means for Canadian goods

Update 7 November: the Section 338 list changed again on 30 October 2026. A proclamation signed 23 October removed 22 tariff codes (including thin plywood, corrugated boxes, paper sacks and some plastic sheet and boxes) and added 100, about 43 of them carpets, rugs and other textile floor coverings, plus items such as shampoo and soap, paints, cocoa powder, window air conditioners, chest freezers, some hand-held power tools, canoes and archery equipment. It applies to goods entered from 12:01 a.m. Eastern on 30 October, still at 50% and whatever their USMCA status (source: Zonos Section 338 guide, citing the proclamation and its Annex I). Check your exact 8-digit code before you reprice.

On 20 October 2026 a US importer sued in the Court of International Trade to overturn the 50% Section 338 tariffs on Canadian goods and get the duty back. The tariffs still apply while the case runs. Here's what the case argues and what sellers and importers can do now.

The tariff being challenged

• Rate: 50%, under Section 338 of the Tariff Act of 1930, in force from 22 August 2026.
• Goods: about $20 billion a year of Canadian goods, first set at 554 tariff codes in three proclamations (alcohol, dairy, and a long "motor vehicles" list). The list was changed on 15 September and again on 30 October (rugs and carpets added, thin plywood removed). Trade summaries name hockey equipment, maple syrup and cheese.
• No USMCA (CUSMA) exemption. Unlike most recent tariffs, qualifying North American goods still pay it.
• Stacking: it adds on top of other duties. Since 15 September 2026 it also stacks on top of Section 232 duties for goods on the alcohol and general lists; only dairy-list goods covered by Section 232 are left out (per Zonos).

The case

• Who: Gellert Global Group, a New Jersey importer of Canadian cheese, represented by the Liberty Justice Center.
• Arguments: that Section 338 can't be used because later trade law (Section 301 of the Trade Act of 1974) covers this kind of dispute; that the 50% rate wasn't tied to any measured harm; and that goods added on 8 September were taxed from 15 September, before the law's 30-day wait.
• Asks for: a halt to collection and a refund of duties paid, with interest. It also asks to act for a class of affected importers.
• Status: the court hasn't ruled and hasn't certified any class. The White House says it will defend the tariffs.

It's the first suit against these specific tariffs. The Supreme Court already struck down the earlier IEEPA tariffs, but that ruling doesn't decide this case, which is under a different law.

What to do now

• Keep pricing as if the 50% applies. Nothing changes until a court orders it.
• Check whether your goods are on the list by their 8-digit tariff code. It reaches well beyond cars and cheese.
• Keep every entry record: entry numbers, dates and duty paid. If refunds come, they'll be tied to entries.
• Watch protest deadlines. If you're the importer of record, ask your broker whether to protest liquidated entries so you don't lose a refund by waiting. How the 180-day protest window works.
• Selling on Etsy from Canada? You prepay US duty on each order, so a 50% item needs a US price that covers it.

Check the US duty on my product

Next: US duty for Canadian Etsy sellers · tariff refund checker · tariff refunds for shoppers.

Sources: Davis Wright Tremaine, "Section 338 tariffs on Canadian goods" (August 2026); GHY International, 21 October 2026; Newsweek, October 2026, on Gellert Global Group v. Trump (US Court of International Trade, filed 20 October 2026). Read 27 October 2026. The company's cost figures are its own claims. General information, not legal advice.