US President Donald Trump orders new 50% tariffs on many Canadian goods, citing discrimination against American alcohol, autos and dairy products.
WASHINGTON: US President Donald Trump signed orders Monday to impose new 50% tariffs on many Canadian goods, claiming “discriminatory treatment” by Ottawa against American alcohol, automobile and dairy products.
The tariffs will take effect in 30 days and cover a range of items including wine, hockey sticks and cement, according to a White House fact sheet.
Trump, who saw many of his tariffs struck down by the Supreme Court earlier this year, tapped an untested legal provision for the new duties — Section 338 of the Tariff Act of 1930.
The latest duties will not apply to energy, potash and goods already impacted by sector-specific tariffs, the White House said.
Crucially, however, they will hit products covered under the US-Mexico-Canada free trade agreement (USMCA).
The announcement quickly sparked concerns of escalation among some businesses.
While Trump has slapped sweeping duties on US trading partners since returning to the presidency last year, the orders generally exempted goods entering his country under the North American free trade pact.
His latest actions threatened to further strain ties with the second largest US trade partner, and come just days after he threatened Canada with increased tariffs over a wave of wildfire smoke that descended into the United States.
The White House, in announcing the new tariffs, said Canada was one of only two countries — along with China — to retaliate against Trump’s sweeping tariffs last year.
It also took aim at the fact that most Canadian provinces have halted purchases of US alcohol, boycotting the products over Trump’s tariff threats and repeated calls for annexation of Canada as America’s “51st state.”
“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,” charged US Trade Representative Jamieson Greer in a statement.
The tariff announcement aims to “hold Canada accountable for its retaliation and discrimination,” he added.
- ‘Litigation risk’ –
Trump’s move marks the first time that Section 338 has been used to impose tariffs, Scott Lincicome of the libertarian Cato Institute told AFP.
Many experts believe that the law has been superseded by other authorities, he said, arguing that Trump has “demonstrated a willingness to use and abuse any statute on the books.”
Ryan Majerus, a former US trade official, told AFP that the law is “subject to a lot of litigation risk” and has never been tested.
“This is clearly designed to get some leverage over Canada,” added Majerus, now a partner at law firm King & Spalding.
He noted that negotiations surrounding the USMCA are ongoing, and that US talks with Mexico have proceeded at a much faster pace than those with Canada.
“This could be an effort to try to get them going,” he said, pointing to the 30-day delay in the tariffs’ implementation.
If the tariffs were to take effect as announced, however, Majerus expects that the removal of exemptions for USMCA imports would be highly negative to US supply chains and businesses.
- Retaliation risk –
Chris Swonger, president of the Distilled Spirits Council of the United States, said the alcohol industry appreciated acknowledgement of Canada’s restrictions.
“We had hoped, however, that this issue could be resolved without further escalation,” Swonger said.
Steep tariffs could risk further retaliation “at a time when many US hospitality businesses continue to face financial hardships,” he said, urging a “negotiated solution.”
Lincicome added that Washington’s discrimination claims over dairy products could be seen as “dubious” too as they relate to terms of Canada’s trade deal with the European Union.
“It’s not a guarantee that a court will strike this down and even if they do, it’ll take a little while,” he said. “In the meantime, there’s just a massive amount of uncertainty.
