Tariff Watch: Section 338’s Final Countdown, Jones Act Waiver Narrowed, ACAS Extended
This week’s Tariff Watch covers the final countdown to 50% Section 338 tariffs on Canada, a narrowed Jones Act waiver, extended ACAS enforcement, and other trade developments affecting importers and supply chains.
Welcome to Tariff Watch for the week of August 17, 2026. This ongoing series from J.M. Rodgers keeps busy importers, manufacturers, and supply chain leaders ahead of the constant changes to US trade policies.
In what is shaping up to be a consequential week for North American trade, unprecedented 50% tariffs on Canada are set to go live on Wednesday. The duties represent the first use of Section 338 of the Tariff Act of 1930 in the law’s history. What will that mean for your business, and what else is going on this week? Let’s take a look and find out.
What’s New
Historic tariffs on Canada set for Wednesday: Barring a last-minute diplomatic breakthrough, the Section 338 50% tariffs on Canada will officially take effect at 12:01 am Eastern this Wednesday, August 19. On July 20, President Donald Trump signed three executive orders calling for the new duties. The law requires at least 30 days between announcement and implementation, making Wednesday the first day the new duties could take effect. The tariffs target roughly $20 billion in Canadian imports, including dairy products, alcoholic beverages, and motor vehicles.
DHS extends but narrows the Jones Act waiver: The Department of Homeland Security officially extended the Jones Act waiver (which allows qualifying goods to move between US ports on non-US vessels) last Thursday. However, DHS also slashed the list of eligible commodities, reducing the number of covered Harmonized Tariff Schedule (HTS) codes from over 600 to just 237. The new list focuses primarily on petroleum products, liquefied natural gas, and fertilizers, while removing commodities like coal, carbon black, and cyclic hydrocarbons.
CBP to continue enhanced ACAS enforcement: Customs and Border Protection announced that it will extend enhanced Air Cargo Advance Screening (ACAS) enforcement measures through May 1, 2027. ACAS imposes strict reporting requirements for inbound air shipments to help identify high-risk cargo before it can be loaded onto US-bound aircraft. CBP’s announcement signals that increased ACAS enforcement will continue until at least Q2 ‘27.
Who’s Impacted
This week’s news promises to affect a broad swath of the supply chain community. Those who will be most impacted include:
Energy and chemical shippers: The narrowing of the Jones Act waiver means businesses transporting newly excluded commodities — including coal, phenols, and chemical solvents — between US ports must now use US-flagged vessels, which could drive up domestic maritime logistics costs.
Importers of Canadian goods: Any business importing goods from Canada covered under the Section 338 executive orders must clear entries before 12:01 am Wednesday to avoid a whopping 50% tariff. Importers should also be aware that USMCA originating status does not protect goods from the new duties.
What We’re Seeing
With significant changes to cross-border trade on the horizon, we’re observing supply chain leaders shifting strategies to protect their margins:
- Importers are holding or pausing uncertain Canadian freight: Because Section 338 tariffs are calculated based on the exact date and time goods enter the US and not when they ship, businesses are rethinking cross-border logistics. If a shipment’s border clearance can’t be confidently confirmed before the Wednesday deadline, many companies are choosing to hold the freight in Canada rather than risk a surprise 50% duty bill caused by border congestion.
- Intense lobbying for a USMCA carve-out: Industry groups are pressuring Ottawa and Washington for a delay or a USMCA-compliant exemption before the Section 338 tariffs go live. Behind the scenes, US and Canadian officials are attempting to negotiate a deal before the Wednesday deadline, but sources say that steel quotas, retaliatory tariffs, and dairy shipments remain sticking points.
- Chemical shippers are scrambling for domestic vessels: With the sudden exclusion of hundreds of chemical and coal HTS codes from the extended Jones Act waiver, logistics planners are rushing to secure compliant US-flagged ships for their domestic maritime routes.
What We’re Monitoring
This week, the J.M. Rodgers team is keeping a close watch on these developing stories:
Preparation for the polysilicon MIP: Following last week’s announcement of a new 15% Section 232 tariff and Minimum Import Price (MIP) program for polysilicon taking effect on December 4, solar and semiconductor supply chains are actively evaluating their pricing documentation. We are monitoring how tech importers are adjusting their procurement contracts to account for the new price floors.
The final countdown to Section 338: We’re watching both the clock and the news wire for any signs of a US-Canada deal that could stop the new duties from taking effect. If a bilateral deal is reached, President Trump could suspend, revoke, or amend his executive orders. But if no deal is struck by Tuesday night, the 50% tariffs will be law shortly after midnight.
The post-de minimis landscape: We continue to keep a close eye on the postal network following the permanent suspension of the de minimis exemption. Numerous retailers are now adapting to formal entry processes and prepaying duties for small B2C shipments that previously would have qualified for duty-free entry.
Subscribe on LinkedInSources
- Revival of a Dormant Tariff Authority: Section 338, Morrison Foerster
- US, Canada Aim for Deal to Avert 50 Percent Tariffs, Washington Post
- DHS Extends Jones Act Waiver Again, Holland & Knight
- CBP Announces Extension of Enhanced ACAS, CBP
- Negotiator Says Tariffs Could Halt Trade Talks, The Globe and Mail