9903.03.12 Explained: 50% Section 338 Duty on Canadian Alcohol

Key Points

• HTS 9903.03.12 imposes a 50 percent additional ad valorem duty on Canadian goods enumerated in U.S. note 51(b)(1), effective for entries on or after August 22, 2026, with no announced end date.
• The legal authority is Proclamation 11046, 91 FR 46639 (FR doc 2026-14991), together with U.S. note 51 to Chapter 99 of the HTSUS.
• The covered product list totals 103 HTS lines; of these, 101 rules are currently in force and 2 have ended. Confirm your specific subheading against the full U.S. note 51(b)(1) enumeration.
• Only goods of Canadian origin (CA) are subject to this code; entries before August 22, 2026 are not covered.
• As of October 6, 2026, no end date has been announced; monitor the HTSUS and Federal Register for changes.

On this page

1. What this code does
2. Program and legal authority
3. Country scope
4. Affected products and HTS coverage
5. Rate and effective window
6. How 9903.03.12 appears on an entry and stacks with other duties
7. What is not covered
8. Recordkeeping and compliance considerations
9. Required actions for importers and brokers
10. Key references

HTS 9903.03.12 imposes an additional 50 percent ad valorem duty on Canadian products enumerated in U.S. note 51(b)(1), effective for entries on or after August 22, 2026. The code is part of the Section 338 Canada actions established by Proclamation 11046. As of October 6, 2026, the covered product list totals 103 HTS lines, of which 101 rules are currently in force and 2 have ended.

The links in this article go to the primary documents: the proclamations, Federal Register notices, and official tariff schedule pages themselves. Read the source.

What this code does

9903.03.12 is a Chapter 99 overlay code that adds a 50 percent ad valorem duty on top of any other applicable duties for enumerated Canadian alcohol and related products. It was created under the Section 338 Canada actions, effective August 22, 2026. The official heading text reads: Products of Canada enumerated in U.S. note 51(b)(1) (alcohol action): +50% ad valorem.

The facts block for this article was updated as of October 6, 2026. Importers who reviewed their Canadian import exposure at an earlier date should re-audit against the current enumeration in the official HTSUS at hts.usitc.gov to confirm which of the 101 currently active rules apply to their products.

Program and legal authority

This code was created under the Section 338 Canada actions. The governing legal authority is Proclamation 11046, 91 FR 46639 (FR doc 2026-14991), together with U.S. note 51 to Chapter 99 of the HTSUS. The product scope is specifically defined in U.S. note 51(b)(1). Check the official HTSUS for the current text of U.S. note 51, as it is the authoritative source for which subheadings are enumerated and which rules remain in force.

Country scope

Only goods of Canada (country of origin CA) are subject to this code. Alcohol or any other product imported from any other country does not fall under 9903.03.12. If you are transshipping through Canada but the goods originate elsewhere, confirm the origin determination carefully with your broker before assuming this code does not apply.

Affected products and HTS coverage

As of October 6, 2026, 103 HTS subheadings are enumerated in U.S. note 51(b)(1), of which 101 rules are currently in force and 2 have ended and are not covered today. The facts block shows the first 40 of those lines, all effective August 22, 2026 onward with no announced end date, and all limited to Canadian-origin goods. They include:

Beer (Chapter 22)

• 2203.00.00

Wine (Chapter 22)

• 2204.10.00 (sparkling wine)
• 2204.21.20, 2204.21.30, 2204.21.50, 2204.21.60, 2204.21.80
• 2204.22.20, 2204.22.40, 2204.22.60, 2204.22.80
• 2204.29.61, 2204.29.81

Vermouth (Chapter 22)

• 2205.10.30

Other fermented beverages (Chapter 22)

• 2206.00.15, 2206.00.30, 2206.00.45, 2206.00.60, 2206.00.90

Undenatured ethyl alcohol (Chapter 22)

• 2207.10.30

Spirits (Chapter 22)

• 2208.20.10, 2208.20.20, 2208.20.30, 2208.20.40, 2208.20.50, 2208.20.60 (brandies and cognacs)
• 2208.30.30 (whiskies)
• 2208.40.20, 2208.40.40, 2208.40.60, 2208.40.80 (rum and other cane-based)
• 2208.50.00 (gin and geneva)
• 2208.60.10, 2208.60.20, 2208.60.50 (vodka)
• 2208.90.10, 2208.90.12, 2208.90.14, 2208.90.15, 2208.90.20 (other spirits)

These 40 lines represent the first 40 shown in the facts block; the full list of 103 enumerated subheadings (101 currently in force) is authoritative only as published in U.S. note 51(b)(1) of the current HTSUS. The facts block does not re-enumerate all remaining lines. Confirm your specific subheading against the full enumeration at hts.usitc.gov or with your customs broker.

Note that 2 of the 103 rules have ended and are not in force today. Do not assume a subheading is active solely because it appears in an older version of U.S. note 51(b)(1); verify against the current HTSUS.

Rate and effective window

The additional duty rate is 50 percent ad valorem, applied on top of any other applicable duties. This rate applies to entries made on or after August 22, 2026. There is no announced end date as of October 6, 2026. Entries filed before August 22, 2026 are not covered by this code, regardless of when the goods were manufactured or shipped.

How 9903.03.12 appears on an entry and stacks with other duties

Chapter 99 overlay mechanics

Like all Chapter 99 special tariff codes, 9903.03.12 is a secondary classification. On a CBP entry, the importer declares both the standard Chapter 1-97 HTS number (for example, a Chapter 22 subheading for Canadian whisky or a Chapter 22 subheading for Canadian wine) and 9903.03.12 as an additional line. CBP's Automated Commercial Environment calculates the Chapter 99 duty separately and adds it to the base duty computed on the Chapter 1-97 line. Use our duty calculator to model your total liability, and see the 2026 tariff code overview for context on how Chapter 99 overlays work alongside Chapter 1-97 classifications.

Duty stacking

The 50 percent additional duty under 9903.03.12 stacks on top of:

• The column 1 (MFN) rate in the Chapter 1-97 classification
• Any other Chapter 99 overlays that may apply to the same entry line
• Any applicable merchandise processing fee and harbor maintenance fee

Confirm with your broker which other Chapter 99 codes, if any, may also apply to your specific product and whether they overlap or stack cumulatively. The facts block does not address interactions with other concurrent trade actions, so do not assume any exclusions or offsets exist without verifying in the current HTSUS.

Bond sufficiency

A 50 percent additional duty significantly increases the dutiable value on your entry. Importers who use continuous bonds should confirm with their surety that the bond amount remains sufficient to cover the higher duty exposure. An undersized bond can result in CBP requiring a single-transaction bond or issuing a demand against your continuous bond. For more on how bond breaches and demands work, see our article on CBP Liquidated Damages: Bond Breaches, Claims, and Petitions.

What is not covered

• Non-Canadian origin goods: Products not originating in Canada do not trigger 9903.03.12, even if shipped through Canada.
• Entries before August 22, 2026: This code has no retroactive effect. Goods entered before the effective date are not subject to the 50 percent additional duty under this code.
• The 2 ended rules: Two of the 103 listed subheadings have rules that have ended and are not in force today. Check the current HTSUS to identify which lines are no longer active before classifying an entry under this heading.
• Subheadings outside U.S. note 51(b)(1): Not every subheading in the affected chapters is enumerated. Check the full note before assuming coverage or non-coverage for any specific line.

Recordkeeping and compliance considerations

Because the 50 percent rate is substantial and the facts block confirms that 2 of the 103 rules have already ended, entries involving covered Canadian goods will attract close scrutiny. Accurate classification and proper declaration of 9903.03.12 on every qualifying entry line is essential. CBP has broad authority to demand unpaid duties even without initiating a penalty action, so misclassification that results in underpayment carries real financial risk. See our article on 19 USC 1592(d) Duty Demand: What CBP Can Collect Without a Penalty for context.

Under standard customs rules, you must retain entry records for five years from the date of entry. Given that this program has no announced end date and the product list can be amended, maintain complete documentation supporting your origin determinations and classification decisions throughout that retention window.

Required actions for importers and brokers

1. Audit your Canadian imports against the current enumeration. The list totals 103 subheadings, with 101 currently in force and 2 ended. Cross-check every Canadian line against the full U.S. note 51(b)(1) enumeration in the current HTSUS at hts.usitc.gov to confirm which rules are active.
2. Verify effective dates at the subheading level. All rules shown in the facts block run from August 22, 2026 onward with no announced end date. Entries filed before August 22, 2026 are not covered by this code.
3. Update ACE filing procedures for covered subheadings. Instruct your customs broker to add 9903.03.12 as a secondary classification on all qualifying entry lines for shipments arriving on or after August 22, 2026.
4. Reassess landed cost and bond sufficiency. Recalculate your duty liability with the 50 percent overlay included across all covered product categories, and confirm with your surety that your continuous bond covers the increased exposure.
5. Monitor for further changes to the enumerated product list. Proclamation 11046 (91 FR 46639) and U.S. note 51 are the primary sources for any modifications. Check the official HTSUS and Federal Register regularly, as no end date has been announced and the product list status can change.

Key references

• Proclamation 11046, 91 FR 46639 (FR doc 2026-14991) -- the governing proclamation establishing the Section 338 Canada actions and the legal basis for 9903.03.12
• Harmonized Tariff Schedule of the United States (hts.usitc.gov) -- the official HTSUS including U.S. note 51 and the full enumeration in note 51(b)(1)
• CBP.gov -- CBP guidance, CSMS messages, and entry filing requirements
• Federal Register (federalregister.gov) -- notices of any amendments to the product list or program terms
• CustomsGenius 2026 tariff code overview -- how Chapter 99 overlay codes interact with Chapter 1-97 classifications
• CustomsGenius duty calculator -- model your total duty liability with the 50 percent overlay