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The Bottom Line
Canada's 50% Section 338 duties on alcoholic beverages, dairy, and motor vehicles were supposed to take effect this morning, but were suspended late last night. They'll now start August 22, with the rate and Annex II lists unchanged. New Section 232 tariffs on drones have been announced and include 100% on larger drones and certain components and 25% on smaller drones. They take effect September 3, with lower rates available for allied-origin products with importer certification. The quartz safeguard took effect August 15 and CBP opened the quota August 17.
The 50% Section 338 duties on Canadian alcoholic beverages, dairy, and motor vehicles were set to take effect this morning. Late last night (less than two hours before the deadline) the President signed a proclamation pushing them back three days. The duties will now start at 12:01 a.m. ET on August 22.
The suspension applies to all three July 20 actions. The Annex II date was changed from August 19 to August 22, and agencies were told to suspend collection.
Everything else stays the same. The rate remains 50%, the Annex II lists are unchanged, and the two existing carve-outs still apply. USMCA qualification does not exempt these goods, and none of the proclamations mention drawback.
The proclamation says Canada has "expressed a commitment" to remove the measures at issue. The President said the two countries have a deal pending final documents, while Prime Minister Carney said progress has been made but work remains.
The suspension only lasts three days. If the documents aren't finalized by Friday, the 50% duties kick in Saturday on the same Annex II products. Imports entered today are unaffected; entries on or after August 22 will be subject to the duties unless another proclamation intervenes.
Source: White House proclamation, August 18, 2026 (suspends Proclamations 11046, 11047 and 11048 of July 20, 2026, at 91 FR 46639, 91 FR 46653 and 91 FR 46661; Federal Register publication of the suspension pending)
On August 13, the President signed a proclamation putting a 100% duty on drones over 25 kg, drones with thermal imagers, docking stations, and certain critical components. Smaller drones (25 kg or less) face a 25% duty. Both rates start September 3, with another set of components subject to 25% starting February 9, 2027.
The duties stack on top of other tariffs, including Section 301. The exception is for qualifying products from allied countries: EU, Japanese, Korean, Taiwanese, Swiss, and Liechtenstein-origin goods can be capped at 15%, while UK-origin goods can be capped at 10%. The importer has to certify that substantially all critical components and technology come from the U.S. or a qualifying country.
A Commerce-approved onshoring plan can bring covered products in at 0% while a U.S. facility is being built, as long as construction starts before January 20, 2029. Drones with Blue UAS or FCC list status as of September 2 get pushed to the February 9, 2027 effective date.
Commerce can also add components to the list through a Federal Register notice, so the scope could expand without much notice.
Source: White House Proclamation, August 13, 2026 and White House Fact Sheet (Federal Register publication pending; Chapter 99 headings in Annex IV)
The quartz surface products safeguard we covered last week is now in effect. The Section 201 tariff-rate quota started August 15, and CBP opened it August 17 in Quota Bulletin 26-601. For the first year, imports face a 25% tariff within the quota and 50% above the quota. The measure applies to engineered stone used for countertops.
The quota runs quarterly, with a first-year limit of about 13 million square meters. Entries filed before 8:30 a.m. Eastern on an opening day are all assigned an 8:30 a.m. time. If the quota is oversubscribed, CBP prorates the entries accepted at that time.
Origin determines whether the safeguard applies. Canada, Mexico, Korea, Israel, Australia, and the CAFTA-DR countries are excluded, as are developing countries below the 3% and 9% import-share thresholds. Goods placed in an FTZ on or after August 15 enter under privileged foreign status, so placing them in a zone does not delay the duty.
Source: CBP Quota Bulletin 26-601, CSMS 69509193, and Federal Register, August 5, 2026 (HTS 6810.99.0020, 6810.99.0040, 7020.00.6000; Chapter 99 headings 9903.45.30 and 9903.45.31; 91 FR 50645)
USTR has opened its annual review of China's compliance with its WTO commitments. The agency is taking public comments and will hold a hearing, with the results feeding into a report to Congress. Comments, requests to testify, and written testimony are due September 17.
On its own, this is a routine annual review. It matters because it gives USTR a chance to build the record before taking further action, and Section 301 remains the main tool behind the administration's China tariffs. If you import from China and want your exposure on the record, this is the time to weigh in.
Source: Federal Register, August 18, 2026 (91 FR 53476)
Drawback on forced-labor and Brazil duties. CBP corrected itself on the August 12 validations that had blocked drawback on the Section 301 forced-labor headings (9903.05.20 through 9903.05.84) and the Brazil heading (9903.05.01). It confirmed both are eligible for drawback, fixed the FD07 validations in production, and updated the Drawback Error Dictionary in ACE. CSMS 69567203
Ink cartridges. The ITC issued a general exclusion order covering infringing ink cartridges. The products can be stopped at the border regardless of who is importing or selling them. The order reaches products that infringe five patents, with cease-and-desist orders also issued against two U.S. companies. Importers and resellers of third-party cartridges should check their products against the patents. 91 FR 53424
Nepalese antiquities. CBP added Nepal to its list of countries with cultural-property import restrictions, effective August 12. Archaeological and ethnological materials covered by the new Designated List now need export documentation to enter the U.S. 91 FR 52005
Whether the Canada documents get finalized. The suspension runs to August 22 and no text of an agreement has been released. Canada has not confirmed a deal or named a concession.
Hold your Canadian Annex II position through Friday
Keep the line list you built for August 19. Nothing has changed: remove anything already paying Section 232 duty, confirm the civil aircraft carve-out where it applies, and treat everything left as exposed starting August 22. Watch for another proclamation before Saturday.
Map drone exposure to September 3
Identify all drone and drone-component lines. Flag anything over 25 kg, thermal-imaging models, and docking stations, since those carry the 100% rate. Model the duty at both 100% and 25%. Check whether the 15% or 10% cap could apply and what certification would be required. Also confirm your Blue UAS or FCC list status before September 2.
Set up your quartz quota reporting
Make sure headings 9903.45.30 and 9903.45.31 are reported correctly and screen origin against the exclusion list. Watch the quarterly quota so a shipment you expected to be in-quota doesn't get caught in a proration. If you have quartz sitting in an FTZ, check that it meets the privileged foreign status requirements.
Decide whether to file on the China review
If you have China exposure, consider submitting a comment to USTR's WTO-compliance review by September 17. This is part of the record USTR will use as it considers future Section 301 action.
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