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

U.S. President Donald Trump signed multiple proclamations on July 20, announcing an additional 50% tariff on a wide range of key imports from Canada starting August 19, regardless of whether these goods originate under the U.S.-Mexico-Canada Agreement (USMCA) framework.

According to lists attached to each proclamation and reviewed by Supply Chain Dive, the tariffs cover a broad range of products, from primary goods such as agricultural products and natural raw materials, to chemicals, textiles, consumer goods, wood products, paper, machinery, and tools, among others.

A White House fact sheet stated that these tariffs apply to all relevant goods, regardless of whether they originate under the USMCA. However, energy, potash, goods subject to Section 232 tariffs, and specific items such as fish and critical minerals are excluded from the additional tariffs.

Trump imposed this maximum-rate tariff under Section 338 of the Tariff Act of 1930 after formally determining that Canada's trade practices in several key areas discriminate against the United States. The determinations are contained in three proclamations, targeting imports of alcoholic beverages, dairy products, and motor vehicles from Canada, respectively.

The White House cited examples such as Canada imposing tariffs and quotas on U.S. imported vehicles, while not imposing such restrictions on vehicles from other countries. The White House also noted that Canada's quota system forces 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.

The fact sheet also mentioned that other Canadian actions prompting the latest U.S. tariffs include the suspension of purchases, distribution, or retail sales of U.S. alcoholic beverages in most of the country's provinces and territories, without imposing similar restrictions on products from other countries.

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

In the motor vehicle proclamation, Trump stated: "The United States, U.S. businesses and workers, and U.S. commerce are suffering due to Canada's discriminatory, unequal, and unreasonable tariff system."

After the Supreme Court struck down Trump's global tariffs imposed under the International Emergency Economic Powers Act, the Trump administration continues to use trade investigations under different trade authorities to impose tariffs on multiple industries and countries.

In February of this year, 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 a large number of fruits and vegetables such as pineapples, bananas, and avocados, as well as beef and certain seafood. The United States cites Sections 301 and 304 of the Trade Act of 1974 as the basis for these tariffs.

These new tariffs are also the latest move in a trade war with Canada that has lasted nearly a year. Over the past year, the two countries have exchanged various tariff threats and imposed industry-specific tariffs, while theoretically still working to review USMCA provisions—an agreement that previously kept many goods free from additional tariffs.

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

"This trade dispute raises the cost of living 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 of both countries."