Customs Compass: Tariff Changes, Enforcement Updates, and Key Compliance Developments
Trade Alert: New 50% U.S. Tariffs on Certain Canadian Goods Effective August 22, 2026
Effective 12:01 a.m. EDT on August 22, 2026, the United States implemented additional 50% duties on certain Canadian-origin goods under Section 338 of the Tariff Act of 1930. These duties apply to a broad range of products identified in Presidential Proclamations addressing U.S. concerns related to Canada's automotive, dairy, and alcoholic beverage policies.
A new 50% ad valorem duty now applies to many Canadian-origin products covered by the Section 338 measures.
The duty became effective for covered goods entered or withdrawn from warehouse for consumption on or after August 22, 2026.
USMCA preferential treatment does not exempt covered goods from these Section 338 duties.
The tariffs are reported under new Chapter 99 provisions:
9903.03.12
9903.03.13
9903.03.14
Exclusions
Certain products remain exempt from the Section 338 duties, including specified goods already subject to Section 232 measures and other designated exclusions. Examples include certain:
Steel and aluminum products
Passenger vehicles and light trucks
Vehicle parts
Medium and heavy-duty vehicles and parts
Wood products
Semiconductor articles
Patented pharmaceutical products
Canadian civil aircraft and related parts and components
What Importers Should Do
We recommend that importers:
Review all Canadian-sourced products for potential Section 338 exposure.
Confirm the country of origin and tariff classification of imported merchandise.
Evaluate landed cost impacts and duty liability on future shipments.
Contact our brokerage team before shipment arrival if you are uncertain whether your products are affected.
Please refer to the below link to CSMS # 69606660 providing guidance issued by US Customs on this new duty, and also includes a full list of the affected tariff numbers that will have the 50% 338 duties applied
https://content.govdelivery.com/bulletins/gd/USDHSCBP-4261d04?wgt_ref=USDHSCBP_WIDGET_2
CBP Form 5106 accuracy: what importers need to know
U.S. Customs and Border Protection (CBP) is enforcing stricter importer of record (IOR) data accuracy requirements submitted on CBP Form 5106 under Executive Order (EO) 14411, signed June 3, 2026. Beginning September 18, 2026, CBP may void IOR numbers having inaccurate or incomplete data.
On August 19, 2026, CBP published a general notice in the Federal Register announcing enhanced enforcement of IOR data accuracy. The notice is one of the first concrete implementation steps of EO 14411 and applies to both new and existing IORs.
If your CBP Form 5106 data is out of date, incomplete, or associated with a third party rather than your organization directly, your IOR number is at risk. Here’s what the enforcement covers, where importers commonly fall short, and what you can do to stay compliant.
CBP Form 5106 is the create/update importer identity form. To obtain an IOR number and make entry into the United States, every importer must complete and submit this form. The six required data elements are:
Importer name
Internal Revenue Service (IRS) Employer Identification Number (EIN), Social Security Number (SSN), or CBP-assigned number
Mailing address
Physical location address (if different from mailing address)
Phone number
Email address
Under the enhanced enforcement measures, CBP will be strictly enforcing the requirement that every one of these elements be accurate, complete, current, and belong directly to the IOR.
CBP’s notice makes clear that it’s conducting a comprehensive review of Form 5106 data on file for all IORs, not just new filings. Where CBP finds inaccuracies, the IOR number may be voided immediately. A voided IOR number is invalid for any purpose, including entering goods into the United States.
If voiding occurs, CBP will notify the affected IOR by email at the address most recently submitted to CBP and will copy the customs broker that last filed on the IOR’s behalf. The notice will include instructions for requesting reestablishment of the IOR number.
An importer can submit and maintain their own CBP Form 5106 (Create/Update Importer Identity Form) information through the ACE Secure Data Portal, provided they have an ACE Importer account with the appropriate importer view access. CBP provides instructions specifically for submitting 5106 information via the ACE Portal.
Instructions for submitting a 5106 via the ACE Portalhttps://www.cbp.gov/document/technical-documentation/instructions-submitting-5106-ace-portal
CBP Reports $100 Billion in IEEPA Refunds and CIT Continues CAPE Phase 3 Process
On August 4, 2026, U.S. Customs and Border Protection (“CBP”) filed its latest status report on the Consolidated Administration and Processing of Entries (“CAPE”) program with the U.S. Court of International Trade (“CIT”). As of July 31, 2026, CBP reported that 252,496 CAPE declarations had been submitted, of which 178,213 passed file validation and covered appx. 25.1 million entries accepted for removal of IEEPA duties via CAPE. Of the accepted entries, 17.69 million had already been liquidated and/or reliquidated without IEEPA duties. Freestyle World, Inc. v. U.S., Court No. 26-01088, ECF No. 24 (Ct. Int’l Trade Aug. 4, 2026).
CBP further reported that approximately $128.68 billion in potential and certified refunds had been accepted for CAPE processing and approximately $100 billion in refunds had been completed, certified, and sent to the U.S. Department of the Treasury for disbursement. However, 19,726 refunds totaling approximately $1.6 billion had not been transmitted because the importer of record or its authorized CBP Form 4811 designee had not provided ACH account information. Id. On August 5, the CIT urged CAPE filers to ensure that their ACH information has been provided to CBP so that refunds may be disbursed. Freestyle World, Inc. v. U.S., Court No. 26-01088, ECF No. 25 (Ct. Int’l Trade Aug. 5, 2026).
With respect to CAPE Phase 3, Judge Eaton’s July 15 order directs CBP to “reliquidate, without regard to IEEPA duties, any and all of Plaintiffs’ entries that have been liquidated for more than 80 days and on which Plaintiffs made estimated deposits pursuant to IEEPA.” Before submitting a CAPE declaration for these entries, plaintiffs must provide CBP with their importer of record identification number(s) in accordance with instructions provided to plaintiffs’ counsel. The Court states that “Once the instructions have been received and followed, a CAPE declaration may be submitted.” In re Tariffs Collected in Reliance on International Emergency Economic Powers Act (IEEPA) (Ct. Int’l Trade July 15, 2026).
We note that we have been informed that DOJ and CBP put a hold on parties submitting CAPE III IEEPA declarations for refunds, explaining that CBP needs to temporarily delay the deployment of CAPE Phase 3 from the original 8/20/26 deployment date. The CIT ordered the Government to file its next CAPE progress report by August 25, 2026. A closed settlement conference will follow on August 26, 2026. Freestyle World, Inc. v. U.S., Court No. 26-01088, ECF No. 25 (Ct. Int’l Trade Aug. 5, 2026). We will continue to monitor CBP guidance and the CIT proceedings for further updates re: implementation of CAPE Phase 3. Stay tuned.
White House Releases “The Great Transshipment Scam” Report as Customs Enforcement Tightens
On August 13, 2026, the White House released a report titled “The Great Transshipment Scam: Rise, Scope, and Costs,” discussing illegal transshipment of higher-tariff merchandise through third countries to evade U.S. tariffs. The report lists more than 40 countries associated with “elevated illegal transshipment risk.” The report also discusses an AI-enabled “Detective Border” being developed to “detect and disrupt illegal transshipment.” CBP is incorporating “machine learning and large language models” into its targeting and risk-analysis platforms. This initiative builds on Executive Order 14411 of June 3, 2026, Strengthening Customs Enforcement, which directs DHS and DOJ to prioritize enforcement with respect to misclassification, undervaluation, and illegal transshipment.
Given the heightened enforcement environment, importers and customs brokers should expect increased scrutiny with respect to importer information and transactions involving third countries. It is essential to continue monitoring CBP’s implementation of Executive Order 14411 and further guidance concerning transshipment enforcement.
New Section 232 Tariffs on Unmanned Aircraft Systems and Components
On August 13, 2026, President Trump issued Proclamation 11055, Adjusting Imports of Unmanned Aircraft Systems and Unmanned Aircraft Systems Components Into the United States, imposing the below tariffs pursuant to Section 232 of the Trade Expansion Act of 1962 on certain unmanned aircraft systems (“UAS”) & their parts and components. Commerce determined that U.S. reliance on foreign UAS and components creates national security and supply chain vulnerabilities, and the President concurred that these imports threaten to impair the national security of the United States.
Effective September 3, 2026, at 12:01 a.m. Eastern Time, the proclamation imposes a 100% additional ad valorem duty on UAS with a maximum take-off weight of more than 25 kilograms, UAS incorporating thermal imagers, UAS docking stations, and certain critical UAS components listed in Annex I. UAS with a maximum take-off weight of 25 kilograms or less that do not have thermal imaging are subject to a 25% additional duty under Annex II. The proclamation also imposes a 25% duty on additional UAS components listed in Annex III, but that duty will not take effect until February 9, 2027. Unless otherwise provided, these Section 232 duties are imposed in addition to other applicable duties.
The proclamation provides reduced tariff rates for certain products of Japan, South Korea, Taiwan, Switzerland, Liechtenstein, the European Union (with the total duty rate capped at 15%), and the United Kingdom (with the duty rate capped at 10%), where the required sourcing and certification criteria are satisfied. Additionally, the proclamation directs Commerce to establish an onshoring program under which companies with approved onshoring plans may import Covered Products for their supply chains, as well as necessary production equipment, without paying the applicable Section 232 duties while their U.S. production facilities are under construction. For companies on the Department of War’s Blue UAS Cleared List, the Blue UAS Framework, or the FCC’s Conditional Approval List on September 2, 2026, the proclamation delays the September 3 effective date by 180 days for certain covered products and components.
Please keep abreast of Commerce and CBP guidance regarding implementation of these new Section 232 tariffs. Stay tuned.
U.S. Section 232 Tariffs and Minimum Import Prices on Polysilicon and Derivatives
On August 6, 2026, President Trump issued a Presidential proclamation, Adjusting Imports of Polysilicon and Its Derivatives Into the United States, following the Department of Commerce’s Section 232 investigation, and concurred with Commerce’s finding that polysilicon and its derivative products are being imported under circumstances that threaten to impair the national security of the United States.
Based on the above finding, effective for goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern Time on December 4, 2026, the proclamation establishes a minimum import price (“MIP”) program for covered polysilicon and derivative products per Annex I and Annex II. The applicable MIPs are $21 per kilogram for polysilicon, $100 per kilogram for polysilicon ingots and wafers, $0.22 per watt for solar cells, and $0.38 per watt for solar modules. Importers will be required to provide documentation supporting compliance with the applicable MIP. If the entered value is below the applicable MIP, the merchandise will generally be subject to a specific tariff equal to the difference between the entered value and the MIP. In addition to the MIP, covered polysilicon ingots and polysilicon derivative products identified in Annexes I & II will also be subject to an additional 15% rate of duty, except as otherwise provided in the proclamation.
We note that for products of the European Union, Japan, Korea, Taiwan, Switzerland, and Liechtenstein, the combined Section 232 tariff and Column 1 duty rate will equal 15 percent. Covered products of the United Kingdom will instead be subject to a 10 percent Section 232 rate. The proclamation provides that these duties generally apply in addition to other applicable duties, taxes, fees, and charges.
The proclamation also establishes an onshoring incentive program and authorizes Commerce and CBP to issue further implement rules and guidance. Of particular importance for importers, CBP is directed to monitor the accuracy of MIP documentation, and any inaccuracies or material noncompliance may result in penalties, including the loss of the ability of the importer and its affiliates to import covered polysilicon products. We will continue to monitor Commerce and CBP guidance as implementation approaches. Please stay tuned for additional information.
CIT Considers Due Process Requirements for CBP Filer Code Deactivation
The U.S. Court of International Trade (“CIT”) is considering a challenge by licensed customs broker Forrest Xu to CBP’s deactivation of his entry filer code. On August 4, 2026, Judge Lisa Wang denied Xu’s request for a temporary restraining order, finding that Plaintiff’s motion did not “establish that Plaintiff will face irreparable harm in the absence of injunctive relief.” Xu subsequently filed an emergency motion for a preliminary injunction on August 7. The Government filed its opposition on August 12 (as amended on August 18), and Xu filed his reply on August 17. As of this writing, the motion for a preliminary injunction remains pending, and no hearing date has been set.
The Government argues that Xu was entitled to the protections of the Administrative Procedure Act (“APA”), specifically 5 U.S.C. § 558(c), which requires written notice of the facts or conduct that may warrant the action and an opportunity to demonstrate or achieve compliance with all lawful requirements, and that CBP provided Xu with those protections. The Government disputes Xu’s position that he was entitled to the greater process applicable to the suspension or revocation of a customs broker’s license. Specifically, the Government argues that “the use of an entry filer code is not the legal equivalent of a customs broker’s license” and that Xu “is not entitled to the same due process as provided for the suspension or revocation of a customs broker’s license.”
The CIT previously addressed this distinction in Lizarraga, where the Court held that “the suspension, deactivation, revocation or similar act or threat thereof of a broker’s entry filer code must comport, at a minimum, with 5 U.S.C. § 558.” Lizarraga Customs Broker v. U.S., Court No. 08-00400, (Ct. Int’l Trade Oct. 4, 2010). The CIT later clarified that this judgment did not resolve “the precise limits of the due process to which Mr. Lizarraga was entitled (i.e., whether he was entitled to the same level of due process that he would have been had Customs wished to revoke his broker’s license)”. Lizarraga Customs Broker v. U.S., Slip Op. 11-128, at 20 (Ct. Int’l Trade Oct. 17, 2011).
Accordingly, the pending Xu case will provide further guidance on the due process required when CBP deactivates a broker’s entry filer code. Please stay tuned as the case unfolds.
Taken together, these developments reflect an increasingly complex U.S. trade and customs environment. New tariffs on Canadian goods, unmanned aircraft systems, and polysilicon products—along with stricter importer data requirements, increased scrutiny of transshipment, and ongoing court proceedings involving IEEPA refunds and broker filer codes—may create new compliance obligations and cost considerations for importers. Businesses should continue monitoring regulatory guidance, verifying customs and importer information, and assessing potential impacts on their supply chains and landed costs. Our team will continue tracking these developments and sharing timely updates as additional guidance becomes available. If you have any questions or would like to discuss how these changes may affect your business, please contact your Scan Global Logistics representative or contact us.
Best regards,
The Scan Global Logistics CHB team