Trump to impose additional 50% tariff on some Canadian goods

US President Donald Trump on July 20 issued new 50% tariffs on a variety of Canadian imports in response to Ottawa's trading policies.

Trump signed three new proclamations on July 20 to impose the additional tariffs, under Section 338 of the Tariff Act of 1930, on certain products from Canada to offset what the administration alleges is "discriminatory" or unfair treatment by Canada against US automotive, alcoholic beverages and dairy industries.

"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 U.S. industry in national-security sensitive sectors," US Trade Representative Jamieson Greer said in a statement July 20.

Metals, oil, natural gas, and electric power were largely spared from the duty, which is set to take effect Aug. 19. However, direct reduced iron and some jewelry made from precious metals, including gold and silver, were among the products listed as subject to the tariff.

Trump's orders include annexes listing the products that will face the new 50% duty. The proclamations on alcoholic beverages and dairy largely target Canadian alcohol and dairy products, including wine, distilled spirits, milk, whey and molasses and other sweeteners. The duty also applies to a few other miscellaneous items, including densified wood, certain kinds of paper and paperboard and ice hockey and field hockey equipment besides balls and skates.

The list of goods subject to the new tariff under the motor vehicles proclamation is much broader, applying across several industries and products including, certain cement products, industrial chemicals, additives and machinery as well as natural honey, vegetable saps and plywood.

The tariff also applies to goods regardless of whether they qualify under the US-Mexico-Canada Agreement.

There are several exemptions to the order, including "certain other goods, such as fish or critical minerals," the White House said. Steel, aluminum and semi-finished copper imports that are already subject to the 50% tariff imposed under Section 232 of the Trade Expansion Act of 1962 are exempt from the new tariff under Trump's July 20 orders.

This move is the latest in a series underscoring tensions between the US and one of its largest trading partners, following the US decision to punt on a renewal of the USMCA, which was up for renegotiation earlier this month.

"Canada believes in the benefits of free and fair trade, as evidenced by our new government signing more than 20 new economic and security partnerships," Canadian Prime Minister Mark Carney said in a July 20 statement in response to Trump's latest orders. "This trade dispute has raised costs for families, particularly in the US. Canada stands ready to engage intensively to address outstanding issues with the US to the mutual benefit of our citizens."

Trump also threatened additional measures on Canada after wildfire smoke led to poor air quality in several US cities. The US president told reporters July 21 that the new tariffs on Canada are not a response to the wildfires, but the administration is "looking at that separately."