U.S. President Donald Trump is planning to enforce a 50 percent import tax on numerous Canadian goods. Unlike previous tariffs during his second term, this latest set of duties is based on a seldom-utilized provision within a law from the Great Depression era.
Section 338 of the U.S. Tariff Act grants the president authority to impose a maximum tariff of 50 percent on imports from nations seen as discriminating against U.S. industries. A senior U.S. official disclosed that Section 338 has not been invoked for this purpose before.
The White House frames these new measures as a reaction to Canada’s response to U.S. trade policies and alleged discrimination against three U.S. sectors: motor vehicles, alcohol, and dairy. The move appears to be retaliation for Canadian provinces not selling American alcohol in government-owned liquor stores and Canada imposing tariffs on certain American autos.
Dairy was singled out due to ongoing concerns regarding Canada’s import quota allocation for U.S. goods, even though Canada’s dairy exports to the U.S. are minimal. The total value of goods affected by these tariffs is estimated to be around $28 billion.
While some of the targeted Canadian goods relate to the issues in the dairy and alcohol industries, others, mostly linked to the auto sector, appear to be symbolic, like hockey sticks.
Unlike previous tariffs imposed by Trump, these new duties will not exempt goods compliant with the Canada-U.S.-Mexico Agreement (CUSMA). The tariffs are scheduled to take effect on August 19, targeting a wide array of Canadian products.
The items subject to tariffs under the dairy grievance include various milk products, animal bones, hops byproducts, and baking mixes. The retaliatory tariffs against provincial alcohol bans cover a range of alcoholic beverages, essential oils, and even hockey sticks. Goods affected under the auto grievance span from honey and feathers to textiles, furniture, machinery, electronics, and leisure items.
This move signifies a significant escalation in trade tensions between the U.S. and Canada.