Trump Reignites Trade War, Slaps 50% Tariffs on Canada

US President Donald Trump has officially signed an executive order to hike import tariffs by up to 50% on various Canadian products. The aggressive protectionist measure was taken by Trump under the pretext of discriminatory treatment by the Ottawa government against American alcohol, automotive, and dairy products.

The new tariff policy will officially take effect within the next 30 days. The White House confirmed that the tariff penalty will hit various Canadian export commodities, ranging from wine and hockey sticks to cement.

To facilitate this unilateral action, Trump invoked a rarely used legal provision, Section 338 of the Tariff Act of 1930. This rule grants US officials full authority to take retaliatory action against countries deemed to be engaging in discriminatory trade practices against American products.

The White House explained that the latest import duties will not apply to the energy sector, potash, or goods that have previously been subject to specific sectoral tariffs. However, a crucial point of this decision is that the new tariffs are confirmed to hit products that are actually protected under the US-Mexico-Canada Agreement (USMCA) free trade deal.

Since returning to the presidency last year, Trump has aggressively imposed sweeping tariffs on US trading partners. However, commodities falling under the North American free trade pact had generally received broad exemptions previously.

Trump’s hardline stance threatens to further muddy diplomatic and economic relations between Washington and Ottawa. The decision comes just days after Trump threatened Canada with tariff hikes due to smoke from severe Canadian wildfires drifting and polluting US airspace.