US to hit Canada with 50% tariffs on wide range of goods
Washington accuses neighbour of engaging in unfair practices in move that could reignite trade war
The US has said it will hit Canada with tariffs of 50 per cent on a wide range of goods in a move that threatens to reignite Donald Trump’s trade war.
Senior Trump administration officials accused Canada of engaging in unfair trade practices, saying its provinces had halted the purchase of US alcohol, slapped tariffs on US cars and discriminated against American cheese.
“At the outset of the president’s trade policy, which he implemented earlier last year, there were only two countries that retaliated against the United States: the People’s Republic of China and Canada,” said a senior administration official.
Trump’s move on Monday risks re-inflaming a global trade skirmish that had eased after the US Supreme Court earlier this year knocked down the president’s global emergency tariffs. Canada is the US’s second-biggest trading partner, with trade between the two amounting to $716bn last year.
The tariffs will take effect in 30 days and will contain exemptions for energy, potash, critical minerals, fish and other products. Goods that are already subject to US national security tariffs, which include steel and aluminium, will also be exempt from the new duties.
But imports that comply with the terms of Trump’s 2020 United States-Mexico-Canada Agreement will not be exempt from the higher levies, despite previously being offered carve-outs from the president’s so-called reciprocal tariffs.
The absence of this carve-out means a large number of Canadian goods that are currently crossing the border free of duties will be hit with substantial levies.
On Monday evening the administration published a list of specific goods that would be subject to the 50 per cent tariff, including milk and dairy products, alcoholic drinks, clothing and furniture.
Canada’s currency fell to session lows following the announcement, leaving it down about 0.4 per cent at C$1.41 to the US dollar.
Mark Carney, Canada’s prime minister, said: “Canada has made a series of detailed and comprehensive proposals to resolve this dispute and to modernise” the US-Canada-Mexico trade deal.
“Canada stands ready to engage intensively to address outstanding issues with the US to the mutual benefit of our citizens,” Carney added.
Doug Ford, the premier of Ontario who enraged Trump by running anti-tariff adverts last year but has since struck a more diplomatic tone, said Canada should retaliate.
“I’ll never stop fighting to protect Ontario,” Ford wrote on X. “If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar.”
The Canadian Chamber of Commerce said the threats were a “regrettable escalation” and called for talks between Washington and Ottawa over the next 30 days.
The Trump administration will base the tariffs on Section 338 of the Tariff Act of 1930, which has never been used to impose duties on trading partners.
A senior administration official said the law gave the president the authority to impose duties when a country discriminated against the US “relative to the treatment it gives a third country”.
On Friday, Trump threatened to impose tariffs on Canada over its failure to manage wildfires that had sent toxic smoke billowing into the US.
US officials on Monday said the tariffs being issued against Canada were separate from the duties being threatened over fires.
“The president has asked for options on that, and options are being shared with him,” an official said. “These tariffs are in response to discriminatory treatment by Canada against US products.”