President Trump is imposing 50% tariffs on a range of Canadian goods, from hockey equipment to alcoholic beverages, escalating the trade dispute between the two countries.
The new tariffs — laid out in a series of proclamations signed by Mr. Trump on Monday — are set to take effect on Aug. 19. The White House accused Canada of “unreasonable, unequal, and discriminatory actions” by imposing tariffs or import restrictions on certain American goods, some of which began after Mr. Trump’s initial round of tariffs on Canada last year.
In retaliation for last year’s Canadian tariffs on certain U.S. auto imports, the Trump administration slapped tariffs on certain Canadian electronics, hockey equipment, honey, flower bulbs, down feathers, plywood, cowhides, jewelry and other goods. The White House also imposed tariffs on Canadian beer, wine, liquor and milk, in response to Canadian boycotts of U.S. alcohol in response to last year’s tariffs and longstanding Canadian quotas on dairy imports.
Goods that flow across the border under the U.S.-Mexico-Canada Agreement, or USMCA — a trade deal inked during Mr. Trump’s first term — will not be exempt from the new tariffs, a senior administration official told reporters Monday.
The official said the new tariffs do not mean the U.S. is entering a trade war with Canada, and the Trump administration remains open to negotiations. But the official argued the U.S. needed to respond to what the White House views as discriminatory trade practices, framing Canada and China as the only two countries that retaliated against Mr. Trump’s tariff-heavy trade strategy.
“While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors,” U.S. Trade Representative Jamieson Greer said in a statement.
The new levies were issued under Section 338 of the Tariff Act of 1930, which gives the president the power to impose duties of up to 50% on any country that “discriminates” against U.S. commerce. The senior administration official said Section 338 has not been used in this way before, but the administration is confident it has the power to impose the tariffs. Mr. Trump’s authority to introduce tariffs was constrained earlier this year by the Supreme Court, which ruled he couldn’t use a separate emergency powers law to impose import duties.
Canadian Prime Minister Mark Carney responded Monday by arguing Canada’s trade actions against the United States last year — including its auto tariffs — “merely matched” the Trump administration’s tariffs, which Carney said violated the USMCA. Carney said the country is willing to negotiate and “modernize” the USMCA.
“This trade dispute has raised costs for families, particularly in the U.S.,” Carney said in a statement. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens.”
The Distilled Spirits Council of the United States — a trade group that represents American producers of spirits like whiskey and vodka — said in a statement Monday that the 50% tariff “deepens trade tensions and raises the risk of further retaliation at a time when many U.S. hospitality businesses continue to face financial hardships.”
“For nearly a year and a half, American spirits have been pulled from store shelves across much of Canada as collateral damage in a broader trade dispute unrelated to our sector, and we appreciate the Administration’s recognition of the significant damage these restrictions have caused U.S. distillers,” said CEO and President Chris Swonger. “We had hoped, however, that this issue could be resolved without further escalation.”
Candace Laing, president and CEO of the Canadian Chamber of Commerce, called the new tariffs a “regrettable escalation” but pushed both countries to use the 30 days before they go into effect to “make meaningful progress in advancing formal talks.”
Canada is the U.S.’ second-largest trading partner, after Mexico, with more than $300 billion worth of goods flowing across the U.S.-Canada border in the first five months of this year, federal data shows.
The two countries have had a rocky relationship on trade since the early weeks of Mr. Trump’s second term, when he threatened hefty tariffs on the U.S.’ northern and southern neighbors in response to what he viewed as insufficient action to prevent drugs and migrants from crossing the border. Canada reacted by rolling out its own tariffs on U.S. goods, and some provinces rolled out their own retaliatory measures, like pulling American alcohol off shelves.
The Trump administration later launched trade talks with Canada, and it rolled back some of its most stringent tariffs by exempting goods that comply with the USMCA, which covers most trade across the U.S.-Canada border. But tensions have remained high, with Mr. Trump periodically threatening to hike tariffs and choosing not to renew the USMCA past 2036. The two countries have also feuded over NATO and Mr. Trump’s frequent musings about annexing Canada.
Late last week, Mr. Trump threatened additional tariffs on Canada in response to wildfires that blanketed the eastern and midwestern U.S. in smoke, arguing the country had been “invaded by filthy, polluted, and unhealthy air.” Canada has defended its handling of the fires.
The senior administration official told reporters that Monday’s levies “are not the so-called wildfire tariffs,” but advisers are sharing options with the president.
