President Donald Trump signed three proclamations Monday that place a 50% tariff on select Canadian goods, which could increase the price of some products imported to the United States from its northern neighbor.
The new tariffs, levied via a never-before-used statute, are the largest tariffs the Trump administration has placed on any country since the Supreme Court limited Trump’s tariff authority in February.
No United States-Mexico-Canada Agreement exemptions will be honored for the lengthy list of affected goods ranging from wood and wood furniture to apparel and cosmetics. This is a change from last year, when USMCA exemptions partially shielded Canada from the double-digit tariffs placed by Trump on Canada and dozens of other countries. They are set to go into effect in 30 days.
The new tariffs come days after Trump threatened Canada with tariffs over wildfire smoke and less than a month after the United States declined to rubber-stamp an extension of the free trade agreement between the United States, Canada and Mexico.
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A senior administration official told reporters the tariffs are being levied independently of any of these recent events.
“These are not the so-called wildfire tariffs. The president has asked for options on that, and options are being shared with him. These tariffs are in response to discriminatory mistreatment by Canada against U.S. products,” the official said in a call with reporters.
The administration cited Section 338 of the Tariff Act of 1930, which allows the president to impose tariffs on countries that discriminate against U.S. commerce.
A senior administration official told reporters that Canada’s decision to retaliate against tariffs from the U.S. by limiting the sale of American liquor in Canadian government-owned liquor stores and putting quotas on American vehicles and dairy products amounted to discrimination.
“These are defensive measures by the United States taken to remedy discriminatory actions by Canada, as the president has made very clear. Both in his campaign and during his administration for the past year and a half, the United States has taken action to protect its national security and to rebalance trade,” the official said.
On July 1, the U.S. opted for a series of annual reviews as opposed to extending the USMCA agreement for 16 years as is. The U.S. has engaged in bilateral talks with Mexico but not Canada.
The official said the U.S. “remains open to discussions with our Canadian trading partners, especially in the context of the USMCA review.”
Over the course of the second Trump administration, the relationship between the U.S. and Canada has continued to devolve, spurred by Trump’s tariffs on Canada and other countries last year.
Trump shared a box with Canadian Prime Minister Mark Carney at the World Cup finals on Sunday, a day before announcing the tariffs.
“Although the president and the prime minister met and they had a one-on-one, it was not a visit to talk about trade and tariffs from our perspective,” the administration official told reporters.
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