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The United States announced sweeping 50 per cent tariffs on a broad range of Canadian products, escalating a trade dispute with one of its closest allies as President Donald Trump accused Canada of maintaining unfair trade barriers against American automobiles, dairy products and alcoholic beverages.
The White House said the new tariffs, which take effect on August 19, will apply to a wide range of Canadian exports, including wine, hockey sticks, cement, furniture, dairy products, fishing rods, swimming pools, seeds, clothing and wigs.
Trump signed three proclamations imposing the tariffs under Section 338 of the Tariff Act of 1930, a little-used provision that allows the US president to levy tariffs of up to 50 per cent on imports from countries found to discriminate against American commerce.
White House cites ‘discriminatory’ trade policies
The Trump administration said Canada continued to retaliate against previous US trade measures while maintaining what Washington described as protectionist policies that disadvantaged American exporters.
“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 US industry in national-security sensitive sectors,” US Trade Representative Jamieson Greer said in a statement.
The White House specifically criticised Canada’s supply-managed dairy system, as well as tariffs and quotas on American-made automobiles. It also pointed to decisions by most Canadian provinces to halt the sale of US alcoholic beverages in response to earlier American tariffs.
According to the White House, Canadian imports of US motor vehicles fell by 22 per cent over the past year, while imports of American alcoholic beverages dropped by 81 per cent.
Tariffs to override USMCA benefits
The new duties will apply even to goods that qualify for preferential treatment under the US-Mexico-Canada Agreement (USMCA), underscoring the Trump administration’s willingness to bypass the regional free trade framework in pursuit of what it calls reciprocal trade.
However, the tariffs will not apply to energy products, potash, fish, critical minerals and products already covered under Section 232 national security tariffs.
Section 338 of the Tariff Act of 1930 has rarely been invoked in modern trade policy, making Monday’s action one of the most significant uses of the Depression-era law in decades.
Latest escalation in strained ties
The latest move marks another deterioration in US-Canada relations, which have become increasingly strained over tariffs and market access.
Just days before announcing the new measures, Trump blamed Canada for wildfire smoke drifting into the United States and threatened to add what he called the “incalculable cost” of dealing with the pollution to existing tariffs on Canadian goods.
The tariffs are expected to further complicate trade between the two North American neighbours, despite the USMCA remaining in force. Economists say the broad scope of the measures could affect manufacturers, retailers and consumers on both sides of the border, particularly in sectors where supply chains are deeply integrated.
The latest action also signals that the Trump administration remains prepared to use unilateral trade tools to pressure partners it believes maintain unfair market barriers, even when those countries are covered by existing free trade agreements.
With inputs from agencies.
