Customs Compass: Canadian Tariffs, IEEPA Refunds and New Import Rules

TRADE AND POLICY UPDATES
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U.S. Expands Section 338 Duties on Certain Canadian-Origin Goods

Effective October 30, 2026, U.S. Customs and Border Protection announced changes to the products of Canada subject to the additional 50% Section 338 duty. The update removes certain products from the additional duty while adding 100 additional HTS classifications under HTSUS 9903.03.14.

The newly affected classifications cover a broad range of products, including certain food and chemical products, plastics, wood and paper products, carpets and textiles, machinery, tools, electronics, medical and measuring equipment, and other manufactured goods. Importers of Canadian-origin merchandise should review their HTS classifications against CBP's revised Section 338 list to determine whether upcoming shipments are affected.

CBP also removed 22 HTS classifications from the 50% additional duty effective October 30, including certain classifications covering plastics, plywood, paper and packaging products, refrigeration equipment, machinery, and agricultural equipment.

Certain exclusions remain available, including specified goods entered under Chapter 98, qualifying civil aircraft and related articles, and other specifically identified products. Section 338 additional duties are also eligible for drawback.

Please review CSMS# 70314289 for complete details: https://content.govdelivery.com/bulletins/gd/USDHSCBP-430e931

CIT Grants Class Certification in IEEPA Tariff Refund Litigation

On October 8, 2026, the U.S. Court of International Trade (“CIT”) issued an Opinion and Order granting class certification in Freestyle World, Inc. v. United States, Court No. 26-01088, in accordance with USCIT Rule 23(b)(2).

The certified class includes importers of record who paid IEEPA duties under the challenged tariff orders between February 1, 2025, and February 19, 2026. The Court excluded “any entity that has separately filed an action seeking to recover IEEPA duties payments.”

While eventual participation in the IEEPA class action suit offers the possibility of an alternative path to refunds, the details of the class action are still being worked through. The CIT may establish a procedure for importers to preserve refunds under the class action, but no such procedure is currently in place. The Government is expected to appeal the class certification ruling, which could take months to resolve.

As of this writing, filing a complaint with the CIT before January 29, 2027, is the only known path to recovering IEEPA duties on finally liquidated entries under CAPE III. Importers relying solely on the class action risk losing the opportunity to pursue individual CIT lawsuits in the event that the appeals are not resolved before that date. Accordingly, we recommend that importers with finally liquidated entries file their own lawsuits and seek refunds via CAPE III.

CBP Launches CAPE Phase 3 for Finally Liquidated IEEPA Entries

On October 6, 2026, CBP confirmed the successful deployment of Phase 3 of its Consolidated Administration and Processing of Entries (“CAPE”) system in a declaration filed with the CIT in Freestyle World, Inc. v. United States, Court No. 26-01088. According to CBP, Phase 3 covers “finally liquidated entries filed by plaintiffs for which the Court has ordered reliquidation.” CBP notified counsel for plaintiffs who submitted valid importer of record (“IOR”) numbers by July 30, 2026, that they could begin filing CAPE Phase 3 declarations and that additional instructions would be provided to plaintiffs who submitted their IOR numbers after that date.

We note that importers should ensure that their CAPE declarations are submitted under the correct IOR number and that their ACH refund information is properly maintained in ACE.

We will continue to monitor CBP's CAPE Phase 3 instructions, particularly for plaintiffs who submitted their IOR numbers after July 30, 2026. Stay tuned.

President Trump Signs Russia and Iran Sanctions Law but Waives Additional Tariffs

On September 18, 2026, President Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (H.R. 5334) into law as Public Law 119-111 (the “Act”). Sections 112 and 113 of the Act address increased tariffs on goods from Russia and certain countries purchasing Russian oil or natural gas or facilitating sanctions evasion.

On October 16, 2026, President Trump issued an Executive Order calling for a 500% duty increase on Russian goods and 100% increases on goods from certain other countries, subject to the conditions and exceptions in the Act. The same Executive Order waives those additional duties under Section 4(a) (“I hereby waive the application of any duties provided for in sections 112 and 113 of the Graham Act or this order.”).

Accordingly, the additional tariffs under Sections 112 and 113 are not currently being imposed. The waivers remain in effect until further action is taken. Please note, the Executive Order does not eliminate existing Russia-related sanctions imposed under other authorities.

New CIT Lawsuit Challenges Section 338 Tariffs on Canadian Goods

On October 20, 2026, Gellert Global Group Corp. filed a complaint with the CIT challenging the Trump Administration’s use of Section 338 to impose additional 50% tariffs on certain Canadian goods. See Gellert Global Group Corp. v. Trump, No. 26-cv-04636.

In its complaint, Gellert argues that Section 338 has been “impliedly repealed” or, at a minimum, is controlled by Section 301. As such, Gellert argues that the President cannot use Section 338 to impose tariffs without complying with Section 301’s procedural requirements (e.g., investigations and consultations) when Section 301 governs the conduct at issue. The complaint also challenges the Administration’s authority under Section 338 and alleges that duties imposed on certain newly covered products violated Section 338’s 30-day waiting requirement. Gellert seeks declaratory and injunctive relief, refunds with interest, and certification of the proposed Class and 30-Day Subclass under USCIT Rule 23.

We will continue to monitor the case’s progress and keep you apprised of any further developments. Stay tuned.

CBP Proposes New Requirements for Low-Value Shipments and Extends Entry Type 13 Mandatory Implementation Date

On October 8, 2026, CBP published a proposed rule titled “Low-Value Shipments”, 91 Fed. Reg. 64532, to revise informal entry requirements for shipments valued at $2,500 or less. Under the proposed rule, CBP would:

• Require electronic filing of Entry Type 11 upon or prior to the date of importation;

• Establish a new electronic informal Entry Type 13 for international mail shipments;

• Require additional entry information, including the name and address of the Final Deliver-To Party if different from the ultimate consignee;

• Require a basic importation and entry bond for Entry Types 11 and 13 and impose a minimum of $1,000 in liquidated damages for breaches of bond conditions; and

• Remove the $250 limit on eligibility for informal entry of merchandise classified under Subchapters III and IV of Chapter 99, HTSUS, and allow articles valued at $2,500 or less to be informally entered.

Comments on the proposed rule are due December 7, 2026, Docket No. USCBP-2026-0298.

On October 14, 2026, CBP announced that it extended the compliance date for mandatory Entry Type 13 filing for certain international mail shipments from October 22, 2026, to January 20, 2027. Beginning January 20, 2027, international mail shipments subject to Section 201, 232, or 301 duties or the jurisdiction of a Partner Government Agency must be filed electronically using Entry Type 13 to qualify for informal entry; otherwise, formal entry is required.

Please note that the extension does not change the existing suspension of the duty-free de minimis exemption.

Please stay tuned for further updates.

DOJ Prioritizes Tariff Evasion and Trade Fraud

On October 1, 2026, DOJ’s National Fraud Enforcement Division issued Directive 26-12, Corporate Enforcement in the Fight Against Fraud (the “Directive”) announcing an “aggressive, all-tools approach” to its trade fraud priorities. The Directive specifically instructs Fraud Division prosecutors, when opening and conducting corporate investigations, to prioritize “[f]raud schemes involving tariff evasion, importation of goods or services, or forced labor.” The Directive provides that prosecutors “must place great weight” on factors including corporate management’s knowledge of or involvement in the fraud and efforts to conceal the fraud from government agencies or auditors when determining whether to bring charges and negotiating plea or other agreements.

The Directive follows DOJ’s establishment of its Trade Fraud Task Force, which DOJ stated would “aggressively pursue enforcement actions” against parties seeking to evade tariffs and other duties through Tariff Act and False Claims Act actions and, where appropriate, parallel criminal prosecutions, penalties, and seizures. The Directive confirms that tariff evasion and trade fraud are express DOJ corporate enforcement priorities.

With Section 338 duties changing, IEEPA refund litigation advancing, and new requirements proposed for low-value shipments, importers should review how these developments may affect their products, entries, and refund options. Importers considering IEEPA duty recovery should pay close attention to applicable deadlines and consult legal counsel about available options. For questions about tariff classifications or customs filings, please contact your CHB team.

Best regards,

Your CHB team