Trade War Escalates! Trump to Impose 50% Tariff on Certain Canadian Goods, Effective in 30 Days

The Trump administration has vowed to impose a 50% tariff on certain Canadian goods, including milk and cream, hockey sticks, and cement, citing Canada's 'unfair treatment of U.S. products,' further escalating trade tensions between the two countries.

A U.S. official briefing the media on Monday (20th) stated that key resource-based imports such as energy, potash, fish products, and critical minerals would be excluded from the tariffs. Additionally, goods already subject to other industry-specific tariffs, such as automobiles and steel, will also be exempted.

More importantly, the official noted that even goods compliant with the U.S.-Mexico-Canada Agreement (USMCA) will not qualify for any exemptions.

Following the announcement, the Canadian dollar weakened against the U.S. dollar, trading at 1.4083 Canadian dollars per U.S. dollar at press time.

The U.S. official said the new tariffs will be implemented under Section 338 of the rarely used Tariff Act of 1930, and are set to take effect 30 days after signing.

Doug Ford, Premier of Ontario, Canada, responded on social media platform X, stating that if the U.S. implements the new tariffs, Canada should 'fight back with tariffs, dollar for dollar.'

Canada has long been a key ally and trading partner of the United States, but relations have visibly deteriorated as Trump aggressively pushes tariff policies and repeatedly expresses dissatisfaction with the USMCA.

The U.S. and Canada clashed in a trade dispute last year, with the Trump administration imposing high tariffs on Canadian goods, prompting retaliatory measures from Canada. This month, the Trump administration announced it would not renew the USMCA, instead initiating a series of annual review procedures, casting uncertainty over the agreement's future.

Last week, Trump harshly criticized Canada over wildfires in northwestern Ontario that degraded air quality across large parts of the U.S. He posted on Truth Social that the fires had cost the U.S. billions of dollars, stating, 'These costs should rightly be added to the tariffs Canada is currently paying.'

However, a senior administration official clarified that the announced 50% tariffs are unrelated to the wildfires, while adding that Trump 'has asked relevant departments to propose response options regarding the wildfires.'

Section 338 of the Tariff Act of 1930 authorizes the U.S. President to impose tariffs of up to 50% on goods from countries deemed to have engaged in discriminatory practices against the U.S.

Lawyers John Veroneau and Catherine Gibson of law firm Covington & Burling noted in a 2016 article that this rarely used tariff authority has 'not been invoked in decades,' and public records show almost no instances of Section 338 being used since 1949.