United States Imposes 50% Tariffs on Multiple Key Imports from Canada

U.S. President Donald Trump issued multiple proclamations on Monday (July 20) announcing an additional 50% tariff on several key imports from Canada starting August 19, regardless of whether those goods qualify under the United States-Mexico-Canada Agreement (USMCA).

According to lists attached to each proclamation and reviewed by Supply Chain Dive, the tariffs apply to a wide range of products, covering everything from agricultural raw materials and natural materials to chemicals, textiles, consumer goods, wood products, paper, machinery, and tools.

A White House fact sheet stated that the tariffs apply to all covered goods, regardless of whether they qualify for preferential treatment under the USMCA. However, the tariffs do 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 tariffs under Section 338 of the Tariff Act of 1930 after formally determining that Canada's trade practices in several key sectors are discriminatory against the United States. These determinations are detailed in three separate proclamations covering alcoholic beverages, dairy products, and motor vehicles imported from Canada.

For example, the White House noted that Canada imposes tariffs and quotas on U.S. imported vehicles but does not impose such restrictions on vehicles from other countries. The White House also noted that Canada's quotas force U.S. automakers to invest in production in Canada rather than in the United States. Additionally, Canada maintains a 25% tariff on U.S. motor vehicles that do not qualify for preferential duty-free treatment under the USMCA.

According to the fact sheet, other Canadian actions prompting the latest U.S. tariffs include most of its provinces and territories halting the purchase, distribution, or retail sale of U.S. alcoholic beverages, while not imposing similar restrictions on products from other countries.

Additionally, according to the fact sheet, Canada's tariff-rate quota on U.S. cheese is more restrictive than the limits it imposes on imports from the European Union, even though Canada has trade agreements with both the United States and the EU.

"The United States, U.S. businesses and workers, and U.S. commerce are being harmed by Canada's discriminatory, unequal, and unreasonable tariff regime," Trump said in the motor vehicle proclamation.

The Trump administration continues to impose tariffs on multiple industries and countries using trade investigations under different trade authorities, after the U.S. Supreme Court struck down its global tariffs imposed under the International Emergency Economic Powers Act.

In February, Trump signed a proclamation imposing a 10% surcharge on imported goods entering the United States under Section 122 of the Trade Act of 1974.

On July 22, the United States plans to begin imposing 25% tariffs on many imports from Brazil, while exempting various fruits and vegetables (such as pineapples, bananas, and avocados) as well as beef and certain seafood. The United States is justifying these tariffs under Sections 301 and 304 of the Trade Act of 1974.

These new tariffs are also the latest blow in a nearly year-long trade war with Canada. Over the past year, the two countries have exchanged various tariff threats and imposed sector-specific tariffs, while theoretically working to review the terms of the USMCA—an agreement that previously exempted many goods from additional tariffs.

Canadian Prime Minister Mark Carney said Monday that the new tariffs "directly violate" the USMCA, but vowed to intensify discussions on modernizing the agreement and resolving the ongoing trade dispute with the United States.

"This trade dispute is raising costs for families, especially in the United States," Carney said in a statement. "Canada is ready to engage deeply with the United States to resolve outstanding issues for the benefit of citizens in both countries."