United States Places 50 Percent Tariffs On Canadian Products

Citing unfair discrimination against U.S. autos, alcohol, and dairy products, on July 20, President Donald Trump announced 50 percent tariffs on Canadian goods. The tariffs, which will take effect in 30 days after the announcement (Aug. 19), will not apply to energy products, potash, fish, and critical minerals, but they will apply to some goods previously protected under the United States-Mexico-Canada Agreement (USMCA).

In all, the proposed tariffs would apply to about five percent of total U.S. imports from Canada.

Canadian Prime Minister Mark Carney said that, in the wake of President Trump’s announcement, he would work to speed up negotiations on a trade agreement with the U.S. and Mexican governments. “Canada will do all that is necessary to support our jobs, our workers, our farmers and to make Canada stronger, more independent and more resilient,” the prime minister promised. That pledge came as the U.S. and Mexican government launched their third rounds of negotiations on the trilateral trade pact. (Reuters has more about those talks. At the conclusion of those discussions, the two countries announced they had agreed to a fourth round.)

President Trump cited authority under Section 338 of the 1930 Trade Act to enact the new penalties on Canada. As a White House fact sheet explained, Section 338 empowers the U.S. president to impose tariffs when a country disadvantages U.S. exporters relative to the exports of another country to offset the disadvantage or burden on U.S. commerce. No U.S. president has ever used Section 338 to impose tariffs before, which means this action is almost certain to face a legal challenge.