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Trump orders 50% tariffs on some Canadian goods
New duties under Section 338 take effect in 30 days; administration alleges unfair treatment from Canada on alcohol, auto, dairy products
The action threatens to further strain relations between the two neighbors, traditionally close allies. (James MacDonald/Bloomberg)
Key Takeaways:
- The Trump administration imposed a new 50% tariff on some Canadian goods July 20 under Section 338 of the 1930 Tariff Act.
- Officials said the action responds to Canada's treatment of U.S. alcohol, auto and dairy products and excludes energy, potash, fish and critical minerals.
- The tariffs take effect in 30 days with no USMCA exemptions, potentially deepening trade tensions as broader negotiations remain unresolved.
The Trump administration is set to impose a fresh 50% tariff on some Canadian goods under a never-before-used legal provision, citing what it said was unfair treatment by Ottawa of American alcohol, automobile and dairy products.
The new tariffs will take effect in 30 days, according to a senior administration official who briefed reporters July 20 on the decision. Certain key imports such as energy, potash, fish, critical minerals and goods covered by separate sectoral duties on industries, including autos and metals, will be excluded.
Crucially, the official said there would be no exemptions for products under the existing North American trade pact between the U.S., Canada and Mexico. President Donald Trump signed a proclamation ordering the tariffs earlier July 20, the official said.
Trump has threatened tariffs on other nations’ goods before, only to pull back on some of them after negotiations or negative market consequences.
The tariffs are being applied under Section 338 of the 1930 Tariff Act, which gives the president the power to impose duties of as much as 50% on countries deemed to discriminate against U.S. commerce. The provision has never before been used to impose tariffs.
RELATED: Trump's Section 122 tariffs expire July 24: Then what?
The July 20 action threatens to further strain relations between the two neighbors, traditionally close allies.
Trump last week threatened to increase tariffs on Canadian products to punish the country for wildfire smoke that covered U.S. cities, including New York and Washington, over the past week. The senior administration official said the U.S. was still exploring options linked to Trump’s threat but that the July 20 action was unrelated to wildfires.
Further complicating the trade relationship between the two countries, the U.S. earlier this month declined to extend its trade agreement, known as USMCA, with Canada and Mexico, setting up what could be years of contentious negotiations.
