The Trump administration has broadened its trade investigations to include 60 nations, including Canada, to support the tariff policies of the U.S. president. U.S. Trade Representative Jamieson Greer stated that they are aiming for swift action within months. The investigations, initiated under Section 301 of the Trade Act of 1974, target the European Union and several other countries as announced by Greer’s office. The department is scrutinizing whether the named countries have policies that unfairly burden or restrict U.S. commerce.
Following the U.S. Supreme Court’s rejection of President Donald Trump’s preferred tariff mechanism used for “Liberation Day” tariffs and duties on Canada, Mexico, and China, Trump enacted a 10% global tariff under Section 122 of the 1974 Trade Act. These tariffs do not apply to goods complying with the Canada-U.S.-Mexico Agreement (CUSMA). The Section 122 tariffs can rise to 15% and expire after 150 days unless extended by Congress, an extension which may not receive congressional approval.
Canada is also affected by Trump’s separate Section 232 tariffs on specific sectors like steel, aluminum, automobiles, and cabinetry. Trump aims to establish long-term tariffs through Section 301 investigations, a process involving public consultations and reports. Greer mentioned that if unfair trading practices such as subsidies or forced labor are found, the administration can impose tariffs on countries failing to address the issues.
The scope of the 301 investigation concerning Canada’s trade practices remains unclear, with longstanding trade issues between Canada and the U.S., notably Canada’s dairy supply management system, being contentious points. The investigations coincide with the upcoming mandatory review of CUSMA by Canada, Mexico, and the U.S. Trump has expressed skepticism about the trade pact and its relevance, casting doubt on its future.
While negotiations on the CUSMA review have commenced officially between the U.S. and Mexico, a similar move with Canada has not been announced. Despite claims by Greer about barriers hindering negotiations with Canada, discussions took place last week between Greer and Canada’s new trade team, including Janice Charette, Mark Wiseman, and Dominic LeBlanc.
