Washington changed the list of Canadian goods subject to its section 338 tariffs in late October, removing some products and adding more. Canada has not changed its counter-tariffs in response. Ottawa has instead adjusted the relief available under its surtax on U.S. goods: the main relief is extended to mid-2028 and will be withdrawn for goods made in Canada. The CBSA has also clarified how the surtax applies to goods under Chapters 98 and 99.
U.S. swaps section 338 tariff lines
Proclamation 11076, signed October 23 and effective 12:01 a.m. ET on October 30, 2026, changes the list of Canadian goods subject to the 50% duties under section 338 of the Tariff Act of 1930. By our count of the annexes, it removes 22 tariff lines, including:
- plastic and paper packaging
- thin plywood
- refrigerating, filling and packing machinery
- seaweed
- egg and fruit sorting machines
It adds 100 tariff lines, led by 43 lines of carpets and floor coverings, along with cocoa powder, certain wood and paper products, some machinery and archery equipment. Canada’s counter-tariffs under the United States Surtax Order (2026) are unchanged, so goods imported from the U.S. are treated the same at the Canadian border as before.
Proclamation 11076 (Federal Register)
Canada extends and narrows its surtax relief
On November 9, the Department of Finance extended the horizontal remission of the surtax on U.S. goods by one year, to June 30, 2028. Relief will also cover non-steel goods used in mining, quarrying and oil and gas extraction, and all goods used by public education entities, including those mandated by Indigenous organizations. At the same time, horizontal relief will be removed for goods with Canadian production. For certain trailers the change takes effect on December 1, 2026. For certain aluminum wire, aluminum extrusions and paperboard products it takes effect on February 1, 2027. Importers of those goods should line up alternative supply or apply for case-by-case remission before those dates. Finance will publish the detailed product schedules on its website.
Department of Finance release · Consolidated list of remission on U.S. surtaxes
Customs Notice 26-23: Chapters 98 and 99
On October 23, the CBSA updated paragraph 7 of Customs Notice 26-23. Goods classified under Chapters 98 and 99 are exempt from the surtax unless two conditions are both met. First, the Chapter 98 or 99 tariff item must be specifically listed in Schedule 4 of the Order. Second, the good must also be classifiable under a tariff item listed in Schedule 1, 2 or 3. Importers using Chapter 98 or 99 tariff items for U.S.-origin goods should check whether their item is listed in Schedule 4.
Read Customs Notice 26-23 on the CBSA website
U.S. kitchen cabinet and vanity tariffs rise January 1
The U.S. section 232 duty on kitchen cabinets and vanities is scheduled to rise from 25% to 50% on January 1, 2027, and the duty on upholstered wooden products from 25% to 30%. The increase was set by Proclamation 11000 in December 2025. It applies to all countries without an agreement with the United States, and Canada does not have one.
