Trump imposes 50% US tariffs on some Canadian goods, citing discrimination

President Donald Trump is set to impose new 50 percent tariffs on a wide range of Canadian goods, alleging "discriminatory treatment" by Ottawa against American alcohol, automobile, and dairy products. The tariffs, ordered Monday, will take effect in 30 days and affect items including wine, hockey sticks, and cement.

This action utilizes Section 338 of the Tariff Act of 1930, a legal provision that has not been widely tested. While energy, potash, and goods already subject to sector-specific tariffs are exempt, the new duties will impact products covered by the United States-Mexico-Canada free trade agreement (USMCA). This marks a departure from previous actions where goods under the North American trade pact were generally exempted.

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Canada has taken US alcohol products off Canadian shelves, given better market access to dairy products from the European Union, and has put a cap on US vehicle exports to Canada from companies reshoring to the United States.

The announcement has sparked fears of escalating trade tensions. The White House stated Canada was one of only two countries, along with China, to retaliate against Trump's tariffs last year. U.S. Trade Representative Jamieson Greer charged that "Canada has taken US alcohol products off Canadian shelves, given better market access to dairy products from the European Union, and has put a cap on US vehicle exports to Canada." The tariffs aim to "hold Canada accountable for its retaliation and discrimination."

Businesses have expressed concern about the potential for escalation. This move further strains ties between the U.S. and its second-largest trade partner, coming shortly after Trump threatened increased tariffs over wildfire smoke. The tariffs also threaten to destabilize the economy, as the invoked law could potentially be applied to other U.S. trading partners.

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The tariff announcement aims to “hold Canada accountable for its retaliation and discrimination”.