Let’s Talk Tariffs with Jamie Rodgers: Canada Responds, Drawback Opens a Door & CBP Gets Practical

Your weekly coffee chat on tariffs & trade.

Well, Canada responded.

After the U.S. imposed 50% Section 338 tariffs on certain Canadian goods, Canada announced retaliatory tariffs of 15% to 50% on roughly $27.6 billion of U.S. exports beginning September 8.

I don’t think anyone who has spent much time around trade policy is particularly shocked by that development. Tariffs have a habit of making the return trip.

But while the retaliation will understandably get most of the headlines, the development that caught my attention this week was actually here at home: CBP confirmed that Section 338 duties are eligible for duty drawback.

When you’re talking about a 50% additional duty, that’s not a footnote.

Coffee’s poured. Let’s get into it.

What Caught My Eye

The drawback confirmation is significant.

Companies importing affected Canadian merchandise that is later exported or destroyed may now have an opportunity to recover eligible Section 338 duties through drawback.

At a 50% duty rate, the economics change quickly. A drawback program that might not have received much attention six months ago could suddenly represent a substantial recovery opportunity.

But there’s an important distinction here: being eligible for drawback and being prepared to claim drawback are two different things.

That’s something we’ve learned over decades of managing drawback programs. The opportunity usually starts long before the claim does.

You need the import data, export records, inventory movement and documentation to support the recovery. If you wait until the duties have piled up before thinking about how you’re going to connect those pieces, you’ve made the job considerably harder.

In other words, “Can we get this money back?” is a good question.

“Are we capturing what we’ll need to get this money back?” is a better one.

The PSC update also caught my attention.

Post Summary Corrections will probably never compete with a 50% tariff for headlines, but CBP’s expanded validation and automation could make correcting entries and recovering overpaid duties before liquidation more efficient.

After 75+ years in customs, we’ve learned not to overlook the procedural changes. Sometimes they end up mattering just as much as the proclamations everyone is talking about.

Here’s My Take

The bigger theme this week is duty management.

Look at how many decisions can now surround a single shipment.

What duty applies when it enters? Is the classification covered by Section 338? Does another tariff program change the treatment? Could the duty ultimately be recovered through drawback? If something was entered incorrectly, what post-entry options remain?

That’s why I’ve never viewed customs as simply a matter of getting goods released at the border.

The entry is one moment in a much longer financial lifecycle.

And with tariff rates where they are today, companies need to understand that entire lifecycle.

We’ve seen a lot of trade programs come and go throughout J.M. Rodgers’ history. The names, rates and regulations change. One thing that doesn’t is the value of knowing your own data.

What are you importing? What are you paying? What are you exporting? Where are the recovery opportunities? And where are you carrying unnecessary exposure?

You can’t control what the next tariff announcement will say.

You can make sure you’re not meeting it with a spreadsheet you haven’t opened since March.

If It Were My Business…

If I were paying Section 338 duties today, I’d be looking beyond the immediate 50% cost.

I’d want to know whether any of those goods are later exported, either in the same condition or after manufacturing, and whether a drawback opportunity exists. Then I’d quantify it.

Not just “we may be eligible.”

How much are we paying monthly? How much of that activity could qualify? What would the potential annual recovery look like? And do we have the records necessary to support it?

I’d also be reviewing affected Canadian imports line by line.

Section 338 applies to specific 8-digit HTS classifications, while goods already subject to Section 232 duties are excluded. At these duty rates, classification and tariff applicability aren’t administrative details. They’re financial decisions.

And if I’m exporting to Canada, September 8 is already on the calendar. I’d be looking at affected products, freight in motion and whether accelerating certain shipments makes commercial sense.

The goal isn’t to react to every tariff headline. It’s to know enough about your business to react to the ones that matter.

One for the Road

September 8 is the obvious date I’m watching as Canada prepares to implement its retaliatory tariffs. We’ll be watching for final CBSA guidance and any diplomatic movement before they take effect.

I’m also watching the textile and apparel TRQ rollout. Importers have already been paying the full Section 301 duty while waiting for this relief, so the quota limits and entry procedures will matter.

If the last few weeks have shown us anything, it’s that the headline is usually only the beginning. The real work starts when companies have to figure out what a new policy actually means for their products, their costs and their decisions.

That’s the part of trade I’ll always find most interesting.

See you next week.

Jamie Rodgers
CEO, J.M. Rodgers Co.