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President Donald Trump on Monday issued several proclamations to impose an additional 50% tariff, starting Aug. 19, on many key imports from Canada, regardless of whether the goods originated through the United States-Mexico-Canada Agreement.
The tariffs apply to a wide variety of products, ranging from raw agricultural and natural materials to chemicals, textiles, consumer goods, wood products, paper, machinery and tools, per annexes provided with each proclamation and reviewed by Supply Chain Dive.
The duties apply to all covered goods, regardless of whether they originate under the U.S.-Mexico-Canada Agreement, per a fact sheet released by the White House. However, the tariffs will not apply to energy, potash, products subject to Section 232 tariffs, and certain other goods, such as fish and critical minerals.
Trump imposed the maximum tariff under Section 338 of the Tariff Act of 1930 after formally finding that Canada’s trade practices in various key sectors discriminated against the U.S. The findings were detailed in three separate proclamations, on tariffs tied to alcohol, dairy and motor vehicle imports from the country.
For example, the White House said Canada imposed duties and quotas on cars imported from the U.S. but not on vehicles from other countries. The White House also pointed out that Canada administers quotas that compel U.S. auto companies to invest in production there, rather than the U.S. In addition, the country has maintained a 25% tariff on U.S. motor vehicles that do not qualify for preferential duty-free treatment under the USMCA.
Other actions by Canada justifying the latest tariffs include most of the country’s provinces and territories halting the purchase, distribution or retailing of U.S. alcoholic beverages while not imposing similar restrictions on other countries, per the fact sheet.
Also, Canada has established tariff-rate quotas on U.S. cheese more restrictive than those imposed on imports from the European Union, despite Canada having trade agreements with the U.S. and the EU, according to the fact sheet.
“The United States, U.S. businesses and workers, and U.S. commerce suffer from Canada’s discriminatory, unequal, and unreasonable tariff scheme,” Trump said in the motor vehicle proclamation.
The Trump administration has continued to leverage trade probes under different trade authorities to install tariffs on numerous sectors and countries after the Supreme Court struck down the global levies he imposed under the International Emergency Economic Powers Act.
In February, Trump signed a proclamation to impose a 10% surcharge on imports entering the U.S. under Section 122 of the Trade Act of 1974.
On July 22, the U.S. is scheduled to begin charging a 25% tariff on many imports from Brazilwhile exempting a wide range of fruits and vegetables, such as pineapples, bananas and avocados, as well as beef and certain seafood products. The U.S. justified those tariffs under Sections 301 and 304 of the Trade Act of 1974.
The fresh tariffs are also the latest salvo in a now year-long trade war with Canada, which has seen the two countries exchange various tariff threats and impose sector-specific duties over the past year — while theoretically working to review the terms of the USMCA, which had, until now, exempted many goods from additional duties.
