You are exposed in both directions, and a CUSMA certificate exempts you from neither. Here is what is captured, where duty stacks, and what to do before your next order book repricing.
In force since 8 September · what hit manufacturers
Southbound (US, from 22 August): machinery, electronics, chemicals, plastics, rubber, textiles, leather, wood and paper products, furniture — all at 50%. CUSMA preferential treatment does not exempt them. Steel and aluminum stay under the separate Section 232 regime and do not stack.
Northbound (Canada, from 8 September): steel and aluminum and their derivative products, electronics, furniture, appliances, pulp and paper, agricultural equipment. If you buy American inputs, that is your side of it — and both sides are live now, not coming: this is being collected on everything clearing customs today.
What we do about it: we map your bill of materials by origin, work out where duty stacks across crossings, build you a private AI knowledge base on your own BOM and agreements, and scope what to build next. The review also covers who else in the world would buy what you make. See what you receive →
What this actually does to a plant
Cross-border manufacturing was built on the assumption that a component could move north and south several times before final assembly without meaningful duty. That assumption is gone for a wide range of goods, and it is gone even for products carrying valid certificates. Talks between Ottawa and Washington have broken down, so plan on this lasting rather than lifting.
- Duty stacks where nobody is looking. Components crossing more than once accumulate duty at each captured entry. It is rarely the products anyone suspects.
- Your order book was priced before this. Supply agreements signed pre-August carry duty the price never contemplated. Whether you absorb it depends entirely on price adjustment language you may not have read in years.
- Second sources take months. Qualification runs three to nine months for tolerance-critical components. Anyone starting in November is starting too late.
Three things to do this week
- Map your bill of materials by HS code and country of origin. Until this document exists, every landed-cost number in the business is an estimate. It is the highest-value thing you can produce this month.
- Count border crossings per finished unit. That is where the stacking hides.
- Read the price adjustment clauses in your top ten supply agreements. Find out now whether you can requote, rather than at the invoice that makes the quarter.
What it looks like in practice
Worked example · a 28-person shop making hand tools and wood-topped workbenches
One plant in southwestern Ontario. Twenty-eight people, about 900 finished units a month, benches at roughly $1,400 and tools between $40 and $180. Sixty per cent of revenue comes from the United States, split between four distributors and a small direct-to-consumer line of replacement parts.
Nobody has checked the actual classification. Section 338 covers 554 specific tariff subheadings, not whole categories. Hand tools and plywood are confirmed on the list, so the benches are caught. Several tool lines may sit one subheading away and be untouched. Screen by code, not category.
The parts line is the quiet loss. The US $800 de minimis exemption ended on 29 August 2025. Every parcel now clears formally and carries a merchandise processing fee of about US$7.85 on a manual entry, on top of duty. One documented case had a $37 item land at $60.17.
Two worries we can retire, and one we cannot. Steel already under Section 232 is excluded from Section 338, so the steel-bodied line is not double-duty. Remission is for inputs that genuinely cannot be sourced outside the US, and this flat-rolled can be. What share of the catalogue is actually caught stays unknown until the codes are screened.
Then the other half. Under the CPTPP, Japanese tariffs on worked wood and aluminum products of up to 7.5% went to zero the day it came into force, and under CETA 98% of EU tariff lines are duty-free for Canadian goods with public procurement worth about $3.3 trillion a year sitting behind them. CanExport SMEs offers up to $50,000 to enter a new export market; its most recent intake closed on 31 August 2026, so the work to do now is the paperwork for the next one.
What we would build:
- A catalogue screener holding every finished good’s actual HS subheading against the 554-line Section 338 list, so the range is split into caught and clear instead of assumed caught.
- A landed-cost calculator on the direct-to-consumer parts cart that adds duty and the merchandise processing fee before checkout, so no $37 part ever lands at $60.17 unannounced.
- A packaging cost line tracking the 50% on corrugated cartons and pricing domestic carton suppliers beside the current one, because that input was never in anyone’s landed cost.
- An export quote generator producing metric spec sheets and HS codes per line for EU and Japanese distributors — US Customs has required HS codes on all cross-border shipments since 1 September anyway.
That is one plant finding out which half of its catalogue was never caught, and charging properly for the half that was.
What you receive
Six things, built for your operation, starting within 48 hours of checkout.
The core is a written review: deep research across your components, suppliers and sector, with a human checking every finding against the actual schedules and discarding what is wrong. You also get a private AI knowledge base trained on your website, bill of materials, supplier list and supply agreements — yours to keep, and able to answer “which parts in assembly four are captured, and does that contract let us requote?” with a source you can check. Running through both is a scoped plan of what we would build, with real hour estimates.
For manufacturers that plan usually includes export market development, because the durable answer to a 50% duty on US-bound goods is frequently a customer who is not in the United States.
Alongside those: a slide deck, a one-page infographic, and video and audio overviews.
See a complete worked example →
What we would build for your plant
- A bill of materials duty calculator mapping every component against current Section 338 and Section 232 schedules to produce true landed cost per finished unit.
- A cross-border flow analyzer tracing how many times each component crosses and quantifying the resulting stacking.
- A dual-sourcing tracker managing alternate supplier qualification from first contact to approved vendor, with cost and lead-time comparison at each stage.
- A dynamic quoting engine generating customer quotes from live component costs and duty rates.
And beyond tariffs: multilingual export channels, marketplace integration and the plant systems you have been putting off. See our case studies.
And the other half — who else would buy this?
If your product is worth buying at a 50% duty, it is worth more to a buyer who does not charge you one. The obstacles are physical and real — freight, certification, a distributor who will actually answer the phone — but under CETA 98% of EU tariff lines are duty-free for Canadian goods, and under the CPTPP Japanese tariffs on worked wood and aluminum products of up to 7.5% went to zero the day it came into force.
98% of tariff lines duty-free, plus public procurement worth about $3.3 trillion a year.
Japan
Duties on worked wood and aluminum products, up to 7.5%, already at zero.
Australia & NZ
No translation and familiar contracts. Freight and biosecurity are the real work.
Getting found
Being the supplier a European or Japanese buyer turns up when they go looking.
Two things worth knowing
This is the sector the money is aimed at
$7.5 billion in federal support, including a $2 billion diversification fund for shovel-ready capital projects and non-repayable contributions up to $3 million. The full list →
The honest version of the Europe pitch
CETA has underdelivered for manufactured goods and the EU is turning protectionist. There are still real paths — they are just not the obvious ones. Selling beyond the US →
Questions we get asked
We have always claimed CUSMA. Does that not protect us?
Not under Section 338. The measure explicitly applies to goods that would otherwise qualify for preferential treatment. It is the sharpest break from previous tariff rounds and the detail most manufacturers have not yet absorbed.
Does the 50% stack on Section 232 steel and aluminum duties?
No, not southbound. Goods already under Section 232 are excluded from Section 338 and continue under their existing treatment. But note that Canada’s counter-tariffs do cover US steel and aluminum and their derivatives, so the northbound exposure is real and separate.
How long does it take to qualify a new supplier?
Three to nine months for most regulated or tolerance-critical components, including sampling, testing and first-article approval. That timeline is exactly why qualification should run in parallel with your cost analysis rather than after it.
Do I have to hire you for software afterwards?
No. The plan is written to be useful whether or not you ever work with us.
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Related
- Logistics and freight
- Warehousing and 3PL
- Construction and trades
- The full rules, in plain English
- Where else in the world would buy this?
The worked example above is an illustration, not a client, and every tariff fact in it is real. Operational and strategic guidance from a software studio, not legal, customs, or tax advice. Confirm classification and duty liability with a licensed customs broker. Last reviewed 11 September 2026.