The United States has announced plans to impose a 50% tariff on goods from Canada, effective in a month's time. The decision comes after President Donald Trump issued an executive order on Monday, citing Canada's retaliation against previous U.S. tariffs and alleged discrimination against U.S. motor vehicles and dairy products.
The new tariffs will target a wide range of Canadian goods, including those that comply with the Canada-U.S.-Mexico Agreement. This move is seen as a response to Canada's actions, including provincial bans on American alcohol and what the White House calls "discrimination" against U.S. motor vehicles and dairy products.
Prime Minister Mark Carney defended Canada's response to Trump's previous tariffs, stating that they were in "direct violation" of CUSMA. Carney emphasized that Canada has made "detailed and comprehensive proposals" to resolve the dispute and modernize the free-trade agreement, and is ready to intensify discussions in the coming weeks.
The Conservatives have condemned the move, accusing the government of failing to secure a new trade deal with the U.S. and calling on President Trump to rescind the 50% tariff immediately. "President Trump is wrong to target Canadian workers and must reverse these tariffs immediately," a joint statement from Tory shadow cabinet critics said.
The new tariff will also follow the White House's announcement on July 1 that it was not renewing CUSMA in its "current form." The White House had justified the decision by citing Section 338 of the U.S. Tariff Act of 1930, which the administration claimed gave the president the authority to impose duties when a country discriminates against the U.S.
The law, however, has been criticized for being "subject to a lot of litigation risk" and has never been tested. Former U.S. trade official Ryan Majerus noted that U.S. talks with Mexico over CUSMA have proceeded at a much faster pace than those with Canada, and that the 30-day delay in the tariff's implementation may be an effort to try to get Canadian talks going.
The new tariff will target a wide range of Canadian goods, including everything from "wine to hockey sticks to cement." The White House statement said that President Trump is taking action to hold Canada accountable for its continued discrimination against and unreasonable and unequal treatment of U.S. commerce.
The 50% tariff is the latest in a series of tariffs imposed by the Trump administration, which have previously targeted steel, aluminum, copper, timber, and pharmaceutical imports over national security issues. Some of those tariffs were overruled by U.S. courts, but Trump has vowed to reimpose them by other means.
Ontario Premier Doug Ford has defended the province's decision to remove American alcohol from liquor stores, saying that Canada should respond "tariff for tariff, dollar for dollar" if the U.S. proceeds with the new tariff.
