The President of the United States, Trump, announced that he would impose a 50 per cent tariff on most Canadian commodities, and that Canada was unfair to the United States in the trade in cars, alcohol and dairy products. The White House indicated that the new measures would come into effect in 30 days, which would also allow time for the parties to continue negotiations.
Under section 338 of the Trade Act 1930
According to White House officials, Trump has signed three announcements to initiate a new set of tariff measures under section 338 of the Trade Act 1930. This provision is rarely used and is seen by some critics as a more radical instrument of trade.
This tariff does not cover all Canadian exports. Energy products, potassium fertilizer, fish and key minerals are excluded, but some of the commodities that were otherwise protected under the United States-Mega Agreement (USMCA) will be covered by taxes.
Trade friction between the United States and Canada has escalated again.
According to the White House, Canada had taken retaliatory action against the former United States tariff measures, which required consequences. In its bulletin, Trump also mentioned that since April 2025, Canada has imposed a 25 per cent tariff on United States cars that do not meet USMCA preferences.
On alcohol, the White House stated that most Canadian provinces and territories had stopped purchasing and retailing United States alcohol products since last year. Dairy products are also a long-standing area of criticism by Trump, who believes that Canada is less open to Europe than the United States in terms of access to cheese and dairy products.
The Federal Government of Canada has not responded immediately. For its part, the Governor of Ontario, Ford, suggested that there might be further confrontations.
Inflation and market risk are receiving renewed attention
The market is concerned that this measure may push US-CAC friction towards a broader trade conflict. Tariffs are essentially import duties, and enterprises tend to shift some of their costs to consumers, thus pushing up the price at the end.
The public is also concerned about the impact of this on the political situation in Trump. Last April, with the introduction of so-called “Emancipation Day” tariffs, financial markets experienced marked fluctuations due to inflation and recession concerns, and the associated rates were subsequently reduced in exchange for negotiating time.
It is noteworthy that the United States Supreme Court ruled in February this year that Trump could not impose related tariffs on the sole ground of an economic emergency. Since then, the White House has sought to raise import rates based on other legal instruments.
At present, the United States claims that Trump also asked the assistant to study whether to impose additional tariffs on Canada, one reason being that Canada ' s wildfires affect United States air quality. As USMCA enters a new phase of negotiations, the US-CA-Trade relationship is under further pressure.