Trump to Hit Canada with New 50% Tariff
By Mike Crawley
Dramatic ramp-up in tariff size, scope set to take effect in 30 days.
U.S. President Donald Trump is moving to impose tariffs of 50 percent on a wide range of Canadian exports, a dramatic ramping up of his trade war against his northern neighbour.
The 50 percent rate is being imposed in response to what a senior administration official described as Canada’s retaliation against U.S. trade policy and its discrimination against U.S. motor vehicles, dairy and alcohol.
“This is not a trade war with Canada, these are defensive measures,” the official said in a conference call with reporters Monday afternoon.
The new rate, laid out in three presidential proclamations, is set to take effect in 30 days.
While energy, potash, critical minerals and fish would be exempt, other products that until now have been allowed into the U.S. tariff-free under terms of the Canada-United States-Mexico Agreement (CUSMA) would be hit.
The 50 per cent tariff is five times higher than the current duty imposed on the small portion of Canada’s exports to the U.S. that don’t comply with CUSMA’s rules of origin regulations.
‘Wine to hockey sticks to cement’
The new rate would apply to a variety of Canadian imports, “ranging from wine to hockey sticks to cement,” the official said, adding that the White House will publish a full list of the affected products.
“By doing this, President Trump is levelling the playing field for crucial American exports,” said the official.
The tariffs are imposed under Section 338 of the U.S. Tariff Act, which gives the president the power to impose a maximum tariff of 50 per cent on imports from countries that are deemed to discriminate against U.S. industry.
Although section 338 “has been on the books for a long time,” the official said it has not been used for this purpose before, which implies the action could face a legal challenge.
“In situations of retaliation like this, it fits squarely with what the statute allows,” the official said. “It gives the president this authority in situations where a country discriminates against the United States relative to the treatment it gives a third country.”
“President Trump is taking action to hold Canada accountable for its continued discrimination against and unreasonable and unequal treatment of U.S. commerce that has burdened and disadvantaged hardworking Americans,” said a statement from the White House.
The sharp increase in tariffs comes amid stalled negotiations between Canada and the U.S. over amendments to CUSMA.
Trump announced the new tariffs one day after joining Prime Minister Mark Carney and Mexican President Claudia Sheinbaum, centre, at the FIFA World Cup final, in East Rutherford, N.J. on Sunday.
Meanwhile, U.S. Trade Representative Jamieson Greer is to travel to Mexico this week for talks.
Trump took “decisive action to hold Canada accountable for its retaliation and discrimination,” Greer said in a news release Monday.
Auto parts, vehicles absent from tariff list
The White House published three lists of Canadian products that will face the new 50 per cent tariff.
The presidential proclamation for each list says the tariffs are designed to “offset Canadian discrimination against the commerce of the United States” in the automotive, dairy and alcohol sectors.
The Canadian products on the dairy list include milk, cream, other dairy products and molasses.
On the alcohol sector list, the Canadian products that will be subject to the 50 per cent tariff rate include beer, wine, cider, whisky and other spirits, but also “ice-hockey and field-hockey articles and equipment (other than balls and skates).”
The automotive sector list is the longest, with more than 350 items across 18 pages. It says the new 50 per cent tariff will apply to such products as Canadian honey, sculptures, fishing rods, dog leashes and down jackets, but not to any vehicles or auto parts.
Canadian reaction to the new U.S. tariffs varied in tone.
Prime Minister Mark Carney called the Trump administration’s move “the latest in a series of unilateral U.S. trade actions” that violate CUSMA.
“Canada has made a series of detailed and comprehensive proposals to resolve this dispute and to modernise CUSMA. We stand ready to intensify those discussions in the coming weeks,” Carney said in a statement.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, called the administration’s move a “regrettable escalation” but noted there are 30 days before the tariffs take effect.
“Both sides need to use this window to make meaningful progress in advancing formal talks,” Laing said in a statement.
Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, called for calm.
‘They turn up the heat’
“We shouldn’t panic,” Volpe told CBC’s Power & Politics. He said Canada went through a similar experience with the Trump administration in his first term, when the negotiations that led to CUSMA hit a critical point.
“They turn the heat up at the end to create a little bit of drama,” Volpe said.
Ontario Premier Doug Ford called for retaliation.
“If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar,” Ford said on social media.
Meanwhile the U.S. spirits industry, which has suffered steep drops in sales because of Canadian provincial liquor agency boycotts of U.S. products, is not celebrating the Trump administration’s move.
“Imposing a 50% tariff on imported spirits from Canada deepens trade tensions and raises the risk of further retaliation,” said the Distilled Spirits Council of the U.S. in a news release.
“We encourage policymakers on both sides of the border to pursue a negotiated solution that restores market access for U.S. spirits and avoids further harm to the U.S. hospitality sector,” the industry group said.
