US President Donald Trump’s 50 per cent tariffs on a wide range of Canadian imports came into effect on Saturday after trade talks collapsed at the last minute, deepening the trade dispute between the two countries. Canada said it would respond with “dollar for dollar” retaliatory measures from September 8.
The new US levies are expected to affect about 5 per cent of Canada’s annual exports to the US, or around USD 20 billion worth of goods. The escalation marks a sharp turn in a trade relationship that had long been one of North America’s most durable, with businesses and households on both sides facing the prospect of higher costs.
The Trump administration said the tariffs would apply to products ranging from hockey sticks to wine and cement. White House documents also listed honey, seeds and other agricultural products, as well as some makeup, perfumes, clothing, jewellery, furniture, cameras and fabric among the affected goods. The 50 per cent levy also covers some products that had earlier been protected under the US-Mexico-Canada Agreement, signalling a shift from previous measures and raising fresh questions about the pact’s future.
Trump has imposed the tariffs using Section 338 of the Tariff Act of 1930, a law from the Great Depression era that has not previously been used to raise tariffs in this way. The provision allows the US president to impose import taxes of up to 50 per cent on goods from countries seen as discriminating against American businesses. No investigation is needed to justify the levy, and there is no time limit on how long it can remain in place, though the move could face legal challenges because there is no precedent.
When he announced the plan last month, Trump said Canada was unfairly discriminating against US exports of automobiles, alcohol and dairy products. He also expressed anger over Canada’s earlier retaliation against his own tariffs, saying Canadian imports of American alcohol and cars had begun to fall last spring.
Canadian Prime Minister Mark Carney said Ottawa would match the new tariffs “dollar for dollar” and later said retaliation would begin on September 8. He said Canada’s tariff increases would target steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Carney said Canada was willing to remove its remaining retaliatory tariffs on steel, aluminium and autos if the US substantially lowered its own tariffs, and to encourage provinces to restore US alcohol sales, but added that Washington’s final demands went too far.
Carney accused Washington of using “economic integration as a weapon” and said Canada had been “attacked” by the latest US tariffs. He said the country had the reserves and resilience to respond. US Trade Representative Jamieson Greer said Washington would take additional steps in response to Canada’s retaliation, though he did not give details. In an interview with Fox & Friends Weekend on Saturday, Greer said the administration had offered to cut tariffs on steel, autos and lumber, but Canada “didn’t want” the deal.
Trade experts warned that the effects of the dispute would spread beyond the directly affected products. “Nearly all industries and professions are likely to see downstream effects from this spiralling trade dispute,” said Augustine Lo of law firm Dorsey & Whitney, whose work includes advising clients on international trade. Dave Townsend, a partner at the same firm, said North America now has a “new tariff landscape” and that a major question was whether the latest levies would be temporary.
Tariffs are paid by importers, or businesses that buy goods from abroad, and the cost often reaches consumers through higher prices. The 50 per cent duties on Canada come on top of earlier levies, including a 10 per cent tariff imposed by Trump last month over claims that Canada was not doing enough to stop imports made with forced labour, along with separate sector-specific tariffs affecting countries globally. The growing sanctions underline Trump’s readiness to strain established alliances, while the dispute adds to uncertainty over prices, jobs and the wider trade outlook. In sum, the new tariffs have pushed the US and Canada further into a trade war, with retaliatory action now set to follow and no further talks scheduled.
With PTI Inputs
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