Trump Hits Canada With 50% Tariffs
- 1Trump signed 50% tariffs on Canadian goods Monday.
- 2The tariffs take effect in 30 days under Section 338.
- 3Energy, potash, critical minerals, and fish are exempted.
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President Donald Trump has imposed 50% tariffs on a wide range of Canadian goods, using a Depression-era trade law that has never before been applied this way.
The tariffs, covering items from wine and hockey sticks to cement and furniture, take effect in 30 days. Trump cited what he called "unequal treatment" of US cars, dairy, and alcohol.
Section 338 Powers Untested Move
Trump signed three proclamations invoking Section 338 of the Tariff Act of 1930, an obscure Depression-era provision that lets a president impose tariffs up to 50% on countries found to discriminate against US goods.
Several Democratic lawmakers proposed repealing the section last year, warning it could be used to destabilize trade relationships, according to reporting reviewed by TheTrendsWire.
The move follows a US Supreme Court ruling earlier this year that struck down sweeping tariffs Trump had imposed globally under emergency powers, forcing the administration to seek other legal routes.
Carney Vows To Intensify Talks
Canadian Prime Minister Mark Carney said Canada stood ready to "intensify" trade discussions with the US in the coming weeks, calling the tariffs a violation of the US-Mexico-Canada Agreement that Trump himself negotiated in his first term.
US Trade Representative Jamieson Greer defended the action, saying Canada "continues to retaliate against the United States for its efforts to rebalance trade."
Candace Laing, head of the Canadian Chamber of Commerce, called the tariffs a "regrettable decision" and urged both sides to make "meaningful progress" before the 30-day window closes.
Ontario Premier Urges Retaliation
Ontario Premier Doug Ford pushed for a harder response, writing on social media that "if these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar."
Canada previously placed a 25% levy on about C$30 billion worth of US goods after Trump's earlier tariff round, though Carney later dropped some of those measures while keeping duties on US cars, steel, and aluminum.
The new 50% rate follows a rapid escalation this year — from 25% to 35%, and now 50% — after Trump terminated trade talks with Canada in June over its digital services tax, which Canada subsequently scrapped.
Third Increase This Year
Monday's move is not an isolated spike. The US raised Canada tariffs from 25% to 35% earlier this year, and now to 50%, after Trump terminated trade talks in June over Canada's digital services tax — a tax Canada scrapped shortly afterward in an attempt to restart negotiations.
That concession did not prevent Monday's escalation, suggesting the underlying dispute runs deeper than any single policy sticking point.
USMCA Dispute Runs Deeper
The tariffs apply regardless of whether goods are covered under the USMCA, since the US chose not to renew that agreement in its original form. Talks on a replacement deal could now run until 2036.
Economist Michael Devereux of the University of British Columbia said the move "directly targets goods that were previously exempt" under the trade pact Trump negotiated and signed himself in 2018, calling it more likely a "grudge" than a negotiating tactic.
The tariffs land days after Trump separately pressed Carney over wildfire smoke drifting into US cities, though the White House has not formally linked the two issues.
Canada remains one of the few countries that retaliated against Trump's earlier global tariff round, a distinction US officials previewing Monday's action cited directly as justification for treating Canada differently from other trading partners.
TheTrendsWire's Take
Canada gave up its digital services tax hoping to de-escalate, and got a bigger tariff anyway — that sequence tells you this dispute isn't really about dairy or cars. Section 338 hasn't been tested in court, and neither has a president's appetite to actually collect on a rate this high once the 30-day clock runs out. Expect posturing on both sides before any resolution; a full-scale 50% tariff regime would hurt US consumers and Canadian exporters in roughly equal measure, which is usually when a deal gets found.
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Business & Finance Editor
Sarah Collins reports on markets, Wall Street, corporate news, and the global economy. She specializes in making financial news accessible to everyday readers.
