Material U.S. legal and regulatory developments — August 23, 2026. Two developments warrant immediate attention: one is a material change from a previously scheduled action that has now become operative, and one is a newly instituted trade investigation with border-level remedy risk.

Primary source: CBP — Section 338 Canada implementation guidance, issued August 21, 2026. Effective: 12:01 a.m. ET, August 22, 2026.

CBP issued implementation instructions late on August 21, confirming that the additional duties became effective at 12:01 a.m. ET on August 22, 2026. Covered Canadian goods entered for consumption, or withdrawn from warehouse for consumption, must now be reported under new HTSUS headings 9903.03.12 through 9903.03.16.

Rate structure:

• 9903.03.12, .13, .14: 50% ad valorem additional duty
• 9903.03.15: 0% additional Section 338 rate — covers specified aluminum, steel and copper products and derivatives; passenger and commercial vehicles and parts; wood products; semiconductor articles; patented pharmaceuticals; and other enumerated products already subject to specified trade measures
• 9903.03.16: 0% additional rate — covers civil aircraft and related parts

Other applicable AD/CVD duties, taxes, and charges remain cumulative with the Section 338 rate where applicable.

Legal and commercial significance: This is no longer a contingent or scheduled action — the duties are operative. The critical compliance point is that USMCA qualification by itself does not eliminate the Section 338 duty for merchandise within the covered lists. Importers who have been treating this as a future planning item must now treat it as a current compliance obligation. The HTS classification of Canadian-origin goods must be mapped against the new headings immediately, and entries made on or after August 22 must reflect the correct heading.

Practice considerations: Canadian-origin contracts and entries require immediate HTS mapping. Purchase and distribution agreements should be reviewed for: tariff allocation between buyer and seller; importer-of-record status and liability; DDP pricing adjustments; duty gross-up provisions; change-in-law clauses; and bonded or warehouse entry timing. For long-term supply agreements, the interaction between the Section 338 rate and any applicable AD/CVD orders must be modeled separately — the rates are cumulative, not alternative. Contracts that allocated tariff risk based on the pre-August 22 rate structure may now require renegotiation or amendment.

CBP — Section 338 Canada implementation guidance | White House — operative Section 338 proclamation

Primary source: USITC — Investigation No. 337-TA-1518. Instituted August 20, 2026; Federal Register notice filed August 21 for publication August 24, 2026.

The USITC instituted Investigation No. 337-TA-1518 on August 20. LG Energy Solution alleges infringement of five U.S. patents involving secondary/rechargeable cylindrical batteries, their components, and products containing those batteries. LG is seeking a limited exclusion order and cease-and-desist orders, which could ultimately restrict importation and U.S. sales of covered products if a violation is found.

Named respondents:

• EVE Energy Co., Ltd. and U.S. affiliates
• Robert Bosch GmbH and Robert Bosch Tool Corporation
• Koki Holdings Co., Ltd. and U.S. affiliates
• Chervon Holdings Ltd. and U.S. affiliates

Institution of the case is not a merits determination. The ALJ must first adjudicate infringement and the domestic-industry requirements. Respondents generally have 20 days after service to answer.

Legal and commercial significance: Section 337 investigations carry a qualitatively different risk profile from ordinary patent litigation. The primary remedy — a limited exclusion order — operates at the border: U.S. Customs and Border Protection enforces it by blocking importation of covered products. This means that an adverse finding does not merely result in damages; it can eliminate the ability to import and sell the affected products in the U.S. market entirely. For companies whose products contain cylindrical battery cells or assemblies sourced through the named respondents, the investigation creates a supply-chain risk that must be assessed now, not after a final determination.

Practice considerations: Battery importers, power-tool manufacturers, distributors, and companies purchasing products containing cylindrical cells should identify whether affected models use cells or assemblies supplied through the named respondents. Long-term supply agreements should address: patent and IP warranties; alternative sourcing obligations; exclusion-order risk allocation; substitution rights; delivery delay provisions; and indemnification. Companies that are not named respondents but source from them should monitor the investigation closely and consider whether to seek intervenor status. Because Section 337 remedies operate at the border, supply-chain contingency planning — including qualification of alternative cell suppliers — should begin before any final determination.

USITC — Section 337 battery investigation announcement | Federal Register — Investigation 337-TA-1518