The U.S. President, Donald Trump, is set to impose a new 50% import duty on a variety of Canadian goods. This latest round of tariffs utilizes Section 338 of the U.S. Tariff Act, a provision from the Great Depression era that has not been previously invoked for this purpose.
Under Section 338, the President has the authority to enforce a maximum tariff of 50% on imports from countries that are seen as discriminating against U.S. industries. A senior U.S. official disclosed that this section has never been utilized in this manner before.
The White House has framed these new tariffs as a response to Canada’s retaliatory actions against U.S. trade policies, particularly targeting the discrimination against three key U.S. sectors: motor vehicles, alcohol, and dairy products.
Specifically, the U.S. retaliated against Canadian provinces for not selling American alcohol in government-owned liquor stores and for Canada imposing tariffs on certain American automobiles.
The decision to include dairy products in the tariffs stems from ongoing disputes over Canada’s import quota regulations for U.S. dairy. Despite Canada’s minimal dairy exports to the U.S., this sector was singled out for tariffs.
Estimates from Canadian government sources suggest that the total value of goods affected by these tariffs could amount to around $28 billion.
While some of the targeted Canadian goods align with the U.S. grievances against the dairy and alcohol sectors, others, mostly related to the auto industry, appear to be symbolic, such as hockey sticks.
Unlike previous tariffs imposed by Trump, these new measures will not exempt goods compliant with the Canada-U.S.-Mexico Agreement (CUSMA). The tariffs are scheduled to take effect on August 19, impacting a wide range of Canadian products.
Here is a breakdown of the tariffs based on the grievances:
Tariffs under the dairy grievance:
- Powdered and concentrated milk or cream
- Concentrated whey protein
- Liquid and dried whey
- Natural milk products
- Animal bones and horns used in manufacturing
- Lupulin, a hops byproduct
- Lactose syrup, gums, and resins
- Glucose and fructose syrup
- Molasses and certain sugar products
- Baking mixes with over 25% butterfat
- Casein products
- Non-alcoholic beer
Tariffs in retaliation against provincial bans on alcohol:
- Malt beer
- Wine and sparkling wine
- Alcoholic cider
- Vermouth
- Sake
- Ethyl alcohol for beverages
- Brandy
- Whisky
- Rum
- Gin
- Vodka
- Liqueurs
- Tequila
- Grapefruit essential oils
- Wooden tableware and bamboo products
- Paper sheets for cooking
- Hockey sticks
Tariffs related to the auto industry grievance:
- Honey
- Down feathers
- Animal bones and horns for manufacturing
- Collector’s items and antiques
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