Section 338 tariffs and how they impact the products made by Art of Where

by Kate • tariffs
Aug 17, 2026

If you sell your Art of Where products to customers in the United States, you’ve probably been hearing a lot about the new tariffs scheduled to take effect this week.

We have too.

Over the last several weeks, our team has been reviewing the new U.S. Section 338 tariff measures, going through our product catalogue and checking the U.S. HTS classifications we use when shipping Art of Where products across the border.

The most important thing we want our customers to know is this:

The new 50% tariff does not apply to every Art of Where product.

Some products will be affected, but a large portion of our catalogue will continue shipping to the U.S. without the new Section 338 tariff.

Here’s what we know as of August 17, 2026.

What is changing on August 19?

The United States has announced new tariffs under Section 338 of the U.S. Tariff Act that are currently scheduled to take effect at 12:01 a.m. Eastern Time on August 19, 2026.

For products included in the affected U.S. tariff classifications, an additional 50% tariff will apply when the goods are imported from Canada.

The tariff is based on a product’s U.S. HTS classification. That’s why two products made and shipped from Art of Where in Montreal can receive completely different tariff treatment.

The new Section 338 tariff can also apply to products that otherwise qualify for duty-free treatment under CUSMA/USMCA.

Which Art of Where products are affected?

We’ve reviewed our current catalogue and identified the AOW products that fall within the affected Section 338 classifications.

As of August 17, the products we expect to receive the additional 50% tariff include:

Clothing

Youth Leggings
Mini Shorts
Shorts
Yoga Shorts
Glitter Yoga Shorts
Bodycon Dress
Flare Dress

Bags

Drawstring Bags
Vegan Leather Backpack

Paper, Prints & Stationery

Large Notebooks
Small Notebooks
Spiral Notebooks
Permanent Stickers
Art Prints
Digital Prints
Poster Prints

Fabrics, Home & Accessories

Holiday Stockings
Crinkle Vegan Leather Fabric
Fine Grain Vegan Leather Fabric
Pebble Vegan Leather Fabric
Vegan Leather Placemats
Printed Patches

If one of these products is shipped to the United States after the tariffs take effect, an additional tariff equal to 50% of the product’s customs value may apply.

The good news: most AOW products are not affected by Section 338

This is the part we really want to emphasize.

A large portion of the Art of Where catalogue is not included in the new Section 338 tariff.

That includes many of our most popular product categories.

Some examples include:

Adult Leggings
Yoga Leggings
Capris and Yoga Capris
Athletic Crop Tops
Relaxed Fit and Slim Fit Tank Tops
Skirts
Baby Leggings
Underwear and Bralettes
Kimonos and Peignoirs
Scarves
Most Tote Bags
Carry-alls
Makeup Bags
Pencil Cases
Vegan Leather Crossbody Purses
Vegan Leather Tote Bags
Blankets
Pillows and Bedding
Tapestries
Tablecloths
Tea Towels
Coasters
Fabric Placemats
Desk Mats
Cotton/Silk Bandanas

And importantly for our Art Fabrics customers, most of our fabric-by-the-metre collection is also not affected, including our cotton, silk and polyester fabrics.

The exception is our vegan leather fabric, which is currently included in the affected tariff classifications.

So while the new tariffs are significant, they are not a 50% increase across everything sold through Art of Where.

What about products that already have tariffs?

This is where things can get a little confusing, because Section 338 isn’t the only U.S. tariff that exists.

Some Art of Where products already have different tariffs or duties and will continue under those rules rather than receiving the new Section 338 tariff.

Section 232 products

Certain steel and aluminum products are already subject to Section 232 tariffs.

For Art of Where, these currently include:

Stainless Steel Water Bottles
Stainless Steel Tumblers
Pet Bowls
Aluminum Prints

These products currently have a 50% Section 232 tariff and are treated separately from the new Section 338 tariffs.

Products that do not qualify as Canadian origin

We also offer some apparel that is manufactured outside Canada and then printed and finished at Art of Where.

These products do not qualify as Canadian-origin goods under CUSMA/USMCA and already have their regular U.S. import duty.

This includes products such as:

T-shirts
Long Sleeve T-shirts
Polo Shirts
Crewneck Sweaters
Pullover and Zipper Hoodies
Racerback Tanks
Premium Unisex Tanks
Unisex Joggers

These products currently have a 26.5% U.S. duty.

That duty is not a new Section 338 tariff. It is part of their existing import treatment.

How much will the new tariff actually cost?

One of the questions we expect dropship sellers to have is whether the 50% tariff is calculated from the retail price their customer pays.

It isn’t.

The tariff is based on the customs value of the product being imported, not the final retail price you choose in Shopify, Etsy or another connected store.

For example, imagine an affected AOW product has a customs value of $20 USD.

A 50% Section 338 tariff would be approximately:

$20 × 50% = $10 USD

If you sell that same product to your customer for $35, $45 or $60, that retail markup does not make the tariff larger.

In other words, your markup is not what the tariff is calculated on.

That distinction makes a big difference when deciding how to price products for your U.S. customers.

What should dropship sellers do?

If you sell to the United States through an AOW-connected store, you don’t necessarily need to change your entire product catalogue or increase prices across the board.

Instead, we recommend looking specifically at the products affected by Section 338.

Depending on your business, you may decide to:

Adjust the retail price of affected products for U.S. customers.
Absorb part of the tariff within your existing margin.
Focus some of your U.S. offering on products that are not affected.
Offer alternative AOW products with similar uses but different tariff treatment.
Keep your current pricing while you see how the situation develops.

Different sellers have different margins, customers and product mixes, so there isn’t one answer that will work for everyone.

The important thing is that you only need to account for the tariff where it actually applies.

What is Art of Where doing?

A big part of our work over the last few weeks has simply been getting specific.

Rather than assuming that everything made in Canada would suddenly carry a 50% tariff, we’ve been reviewing the HTS classifications of individual AOW products so that we can understand where the tariff actually applies.

That work has already shown us that many AOW products can continue entering the U.S. without the new Section 338 tariff.

We’re also continuing to look at our products, shipping processes and operations for ways to reduce the impact for our customers.

Some product classifications are very dependent on a product’s construction, materials and intended use, so we will continue reviewing classifications where appropriate.

And because this situation can change, we’ll keep updating our Help Center and customer communications as new information becomes available.

For now, U.S. selling is very much still possible

A 50% tariff sounds enormous — and on the products it affects, it is significant.

But it’s important to put it in context.

It is not a 50% tariff on every Canadian product and it is not a 50% increase across the Art of Where catalogue.

Many of the products our customers already sell to the U.S. are not affected by the new Section 338 measure at all.

Our goal is to give you enough information to make smart decisions about your products and pricing without making the situation more complicated or alarming than it needs to be.

We’ll continue doing the customs homework on our side so you can focus on creating, selling and building your business.

For the latest product lists and tariff information, please check our USA Tariff Help Center, which we’ll continue updating as things change.

The information in this article reflects our understanding of U.S. tariff requirements as of August 17, 2026. Tariff rules and customs classifications can change, and final tariff treatment is determined by U.S. Customs and Border Protection.