Section 338 Canada duties: 50% rates, FTZ status, and drawback eligibility
CSMS #69606660 implements Section 338 additional duties on certain Canadian goods. Filing rates, Chapter 98 nuances, FTZ privileged foreign status, HTS reporting order, and the drawback sentence as published.
CSMS #69606660 is CBP's filing guide for Section 338 additional duties on certain goods of Canada. For goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on August 22, 2026, filers use HTSUS headings 9903.03.12 through 9903.03.16.
The operational headline for drawback teams: the CSMS states that the additional duty imposed by headings 9903.04.12 to 9903.04.14 is subject to drawback. Quote that wording as published. Do not invent a broader or narrower HTS list than the message uses.
CSMS #69606660: the additional duty imposed by headings 9903.04.12 to 9903.04.14 is subject to drawback.
Rates under 9903.03.12–16
The CSMS implements the July 20, 2026 Presidential Proclamations on additional duties to offset Canadian discrimination against U.S. commerce with respect to alcoholic beverages, dairy, and motor vehicles, as adjusted by the August 18, 2026 temporary suspension proclamation (Proc. 11056) that paused the 50 percent additional duties until 12:01 a.m. eastern time on August 22, 2026.
- 9903.03.12: articles the product of Canada as provided in subdivision (b)(1) of U.S. note 51; 50% additional ad valorem.
- 9903.03.13: articles as provided in subdivision (b)(2) of U.S. note 51; 50% additional ad valorem.
- 9903.03.14: articles as provided in subdivision (b)(3) of U.S. note 51; 50% additional ad valorem.
- 9903.03.15: aluminum, steel, or copper articles (and listed derivative / vehicle / wood / semiconductor / patented pharmaceutical carveouts) as provided in subdivision (c) of U.S. note 51; 0% additional ad valorem.
- 9903.03.16: civil aircraft articles and related parts/components as provided in subdivision (d) of U.S. note 51; 0% additional ad valorem.
Products under 9903.03.12–9903.03.16 remain subject to antidumping, countervailing, or other duties, taxes, fees, exactions, and charges that apply, as well as to the additional ad valorem rate imposed by the heading. Use the CSMS attachment for the Chapter 1 to 97 HTSUS classifications that correspond to each Chapter 99 heading, and see 91 FR 46639, 91 FR 46653, and 91 FR 46663.
Filing headings (rates): 9903.03.12–9903.03.16
Chapter 98 / drawback wording in CSMS: 9903.04.12–9903.04.14
CSMS #69606660
Chapter 98 nuance (as published)
Under the CSMS Chapter 98 section, the additional duty imposed by headings 9903.04.12 to 9903.04.14 shall not apply to goods for which entry is properly claimed under a provision of chapter 98 pursuant to applicable CBP regulations, and whenever CBP agrees that entry under such a provision is appropriate, except for goods entered under subchapter XXIII of chapter 98, subheadings 9802.00.40, 9802.00.50, and 9802.00.60, and heading 9802.00.80.
For 9802.00.40, 9802.00.50, and 9802.00.60, the additional duty applies to the value of repairs, alterations, or processing performed, as described in the applicable subheading. For 9802.00.80, the additional duty applies to the value of the article assembled abroad, less the cost or value of such products of the United States, as described.
The rate table in CSMS #69606660 uses 9903.03.12–16. The Chapter 98 and Drawback paragraphs use 9903.04.12–14. File against the headings your commodity list and ACE edits require, and keep claim logic aligned to the drawback wording as published in the CSMS. Do not paper over the 03 vs. 04 difference in SOPs.
FTZ: privileged foreign status
Any product subject to the additional duty under these proclamations that is admitted into a U.S. foreign trade zone, except a product eligible for admission under domestic status as defined in 19 C.F.R. § 146.43, may only be admitted as privileged foreign status as defined in 19 C.F.R. § 146.41. On entry for consumption, it is subject to any ad valorem rate of duty related to the classification under the applicable HTSUS subheading.
HTSUS reporting order
When a Chapter 98 and/or 99 heading is claimed, CSMS #69606660 requires this reporting order on the entry summary line:
- Chapter 98 (if applicable)
- Chapter 99 number(s) for additional duties (if applicable)
- For trade remedies: Section 301, then Section 122, then Section 232, then Section 201 duties (if applicable), then Section 201 quota (if applicable)
- Chapter 99 number(s) for replacement duty or other use (MTB or other provisions)
- Chapter 99 number for other quota not covered above (if applicable)
- Chapter 1 to 97 commodity tariff
Report entered value on the Chapter 1–97 classification unless Chapter 98 reporting provisions require a different value treatment. Section 338 entry-filing questions go to TradeRemedy@cbp.dhs.gov. Entry summary errors go to your CBP client representative or the ACE Help Desk.
- Section 338 Canada additional duties: effective Aug. 22, 2026, 12:01 a.m. ET under 9903.03.12–16 (CSMS #69606660).
- Rates: 50% under 9903.03.12–14; 0% under 9903.03.15–16.
- CSMS drawback wording: additional duty imposed by 9903.04.12–14 is subject to drawback.
- Chapter 98: additional duty under 9903.04.12–14 generally does not apply when chapter 98 is properly claimed, with stated exceptions for subchapter XXIII and 9802.00.40/50/60/80 value rules.
- FTZ admissions (except domestic status) must use privileged foreign status (§ 146.41).
- Follow the published Chapter 98 → Chapter 99 additional duties → trade-remedy sequence → Ch. 1–97 reporting order.
- CSMS #69606660 - GUIDANCE: Section 338 Additional Duties on Certain Goods of Canada · U.S. Customs and Border Protection
This article is for general information and is not legal or tax advice. Drawback eligibility depends on your specific facts, and final refunds are determined by CBP at liquidation. Consult a licensed customs broker or attorney for your situation.