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🇦🇺 Australia /Economy & Trade

US to impose 50pc tariffs on most Canadian goods

From ABC Australia · () English

Summarized and contextualized by DistantNews.

At a glance

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  • The U.S. is imposing 50 percent tariffs on most Canadian goods, citing unfair discrimination against American vehicles, alcohol, and dairy products.
  • These tariffs, effective in 30 days, will exclude energy and minerals but include goods previously protected by the USMCA trade pact.
  • The move risks escalating into a wider trade war, with Canadian officials and business leaders calling for negotiations to avoid further economic disruption.

U.S. President Donald Trump has imposed 50 percent tariffs on most Canadian goods, declaring that Canada has unfairly discriminated against American vehicles, alcohol, and dairy products. This action could unleash new economic chaos, potentially leading to higher inflation and further fraying relations between the two nations.

An administration official, speaking anonymously, stated that Canada was one of the few nations besides China to retaliate against Trump's previous tariffs and must be held accountable. President Trump signed three proclamations to launch the tariffs under Section 338 of the 1930 Trade Act. Some Democratic politicians had previously proposed repealing this section, fearing Trump could use it to destabilize the economy.

If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar.

— Doug FordOntario Premier, reacting to the potential tariffs.

The new 50 percent tariffs will exclude energy products, potash, fish, and critical minerals. However, they will include goods previously protected from import taxes by the United States-Mexico-Canada Agreement (USMCA). The White House indicated the tariffs would go into effect in 30 days, leaving room for negotiations as Trump has not always followed through on announced import tax hikes.

We encourage policymakers on both sides of the border to pursue a negotiated solution that restores market access for US spirits and avoids further harm to the US hospitality sector.

— Chris SwongerCEO of the Distilled Spirits Council of the United States, calling for a resolution.

Canadian Prime Minister Mark Carney had previously met with Donald Trump. Ontario Premier Doug Ford suggested a tariff-for-tariff response if the tariffs proceed. Candace Laing, CEO of the Canadian Chamber of Commerce, called the moves "regrettable" but urged both countries to use the 30-day window for "meaningful progress in advancing formal talks." Chris Swonger, CEO of the Distilled Spirits Council of the United States, also called for a negotiated solution.

Scott Lincicome, vice-president of general economics at the Cato Institute, described the invocation of Section 338 as the "nuclear option for Trump tariffs." He warned that applying this Great Depression-era law could broaden risks to other U.S. trading partners and inject "massive uncertainty" into the global economy.

We crossed the Rubicon. The invocation of 338 is the nuclear option for Trump tariffs.

— Scott LincicomeVice-president of general economics at the Cato Institute, commenting on the legal basis for the tariffs.
DistantNews Editorial

Originally published by ABC Australia. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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