Tariff Watch: More Section 338 Changes, New Lawsuit in the CIT, CBP Deploys ACE Updates

Section 338 tariffs on Canadian goods are changing again, with new product exclusions and additional 50% duties taking effect October 30. This week’s Tariff Watch also covers a new Court of International Trade lawsuit challenging Section 338, CBP’s latest ACE updates, and important compliance developments for importers.

  • October 26, 2026
  • J.M. Rodgers Team
  • Reading Time: 4 minutes
Home » Tariff Watch: More Section 338 Changes, New Lawsuit in the CIT, CBP Deploys ACE Updates
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Welcome to the latest edition of Tariff Watch, the weekly series from J.M. Rodgers that keeps busy importers, manufacturers, and supply chain leaders updated on rapidly changing US trade policies.

As October draws to a close, US supply chains face another round of changes to the Section 338 tariffs on Canadian goods, while a new plaintiff filed suit in the Court of International Trade challenging the legitimacy of Section 338 duties and seeking class-action status. Here’s what you need to know this week.

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What’s New

  • Trump again adjusts Section 338 scope: On Friday, October 23, President Donald Trump signed an executive order further modifying the scope of the Section 338 tariffs on certain Canadian goods. The order, which takes effect this Friday, October 30, removes the 50% ad valorem tariffs on plywood sheets, selected plastics, and corrugated cartons, among other Canadian packaging, wood, and paper products. However, specific carpets, vinyl flooring, window air conditioners, paints, and cocoa powders now face new 50% tariffs. The President last adjusted the scope of the Section 338 tariffs on September 8, and an outright ban on several Canadian goods went into effect on September 29.
  • New lawsuit at CIT challenges Section 338: New Jersey-based food importer Gellert Global Group Corp. filed suit in the Court of International Trade (CIT) on Tuesday, October 20, challenging the Section 338 tariffs the Trump administration implemented earlier this year. The lawsuit seeks class action status for all importers of record who have paid or will pay Section 338 duties and argues that the Tariff Act of 1930 grants Congress the right to impose tariffs, not a president acting unilaterally. Although the CIT has not set any deadlines yet, the government is expected to respond by the end of the year.
  • CBP deploys ACE updates: US Customs and Border Protection (CBP) deployed two major updates to the Automated Commercial Environment (ACE) over the weekend. On Friday, the agency rolled out Electronic Export Manifest (EEM) enhancements for truck cargo, and then deployed ACE Manifest Modernization Release 3 on Saturday. CBP is seeking testers for the EEM update, while the Manifest Modernization update expands ocean manifest EDI services for carriers and forwarders.

Who’s Impacted

Here’s who is most affected by this week’s trade news:

  • Importers of Canadian goods: Businesses sourcing products from Canada should review the latest list of Section 338 tariffs before the scope changes take effect this Friday. While the October 23 executive order offers relief on a narrow set of Canadian goods, some popular products previously exempt from Section 338 now face 50% additional duties.
  • Ocean and highway carriers: Freight forwarders, NVOCCs, and carriers managing outbound and inbound cargo must confirm their EDI software still works as expected, following the ACE Manifest Modernization Release 3. Meanwhile, highway carriers can apply to test the EEM truck enhancements that were also deployed this past weekend.

What We’re Seeing

This week, supply chain leaders are:

  • Updating ACE logic ahead of Friday: With the newest Section 338 scope changes hitting October 30, compliance teams and customs brokers are updating and testing their entry instructions, classifications, and duty calculation logic. Because Section 338 tariffs stack on top of existing Section 232 duties and ignore USMCA origin, failing to update item masters could result in underpayments or outright rejections in ACE.
  • Adjusting to MFA for refunds: Compliance teams continue to adjust to CBP’s recent multi-factor authentication (MFA) mandate for ACH refund accounts. Since October 10, any changes to ACH banking details for duty drawback or IEEPA CAPE portal refunds require a security code delivered by email or SMS to fully process. Importers are auditing their ACE setups for security to ensure old or unmonitored email addresses don’t delay disbursements.

What We’re Monitoring

The J.M. Rodgers team is closely watching these ongoing stories:

  • The Section 338 litigation: We will be closely tracking the newly filed lawsuit challenging the 50% tariffs on Canadian imports. While the CIT hasn’t set any hearings or filing deadlines yet, any injunctions or temporary restraining orders could significantly alter the entire North American supply chain.
  • Public comment on proposed rulemaking: We continue to track industry feedback on CBP’s Advance Notice of Proposed Rulemaking for Heightened Import Disclosures for Supply Chain Visibility. Businesses have until December 1 to submit comments on the proposal, which could require submitting foreign export documentation and expanded supply chain tracing data at entry.

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That wraps up another busy week in US trade news! To ensure you don’t miss any news going forward, subscribe to Tariff Watch here.


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Sources

  • Trump Is Exempting Some Canadian Goods From 50% Tariffs, Quartz
  • Importer of Canadian Products Challenges Section 338 Tariffs, SmarTrade
  • Electronic Export Manifest for Truck Cargo Test, Federal Register
  • ACE Manifest Modernization Release 3-Ocean, CBP
  • Addition of Verification Step for ACH Refund Changes, CBP