Washington will impose 50% tariffs on nearly US$20 billion in Canadian goods starting this week, invoking a rarely used Depression-era statute and stripping USMCA-compliant products of their usual protection. The move deepens Canada’s exclusion from the ongoing USMCA review talks, where Mexico has instead grown its share of the US import market by avoiding retaliation and aligning trade policy with Washington’s priorities. For companies with North American supply chains, the episode signals that USMCA compliance no longer guarantees exemption from unilateral US tariff action.<\/p>\n
Canada is entering a new phase of trade friction with the United States this week: starting Aug. 19, Washington will apply duties of up to 50% on a wide range of Canadian goods, a move business groups warn could cost jobs and one that further complicates the review of North America’s trade pact, just as Mexico positions itself as the White House’s preferred regional partner.<\/p>\n
A Tariff Rooted in a 1930 Law<\/p>\n
President Donald Trump invoked Section 338 of the Depression-era Tariff Act of 1930, a provision almost never used before, to justify the\u00a0new levy, which targets trading partners deemed to discriminate against US products.<\/a> The measure will hit Canadian wine, furniture, dairy, cement, apparel, fishing rods and hockey equipment, among other goods.<\/p>\n According to US Census Bureau figures, the new tariff would affect close to US$20 billion in Canadian merchandise, roughly 5.2% of the $383 billion Washington imported from its northern neighbor in 2025. Unlike previous rounds of tariffs, this one will strike even goods that meet USMCA rules of origin, a shift that strips away much of the protection the trilateral pact had offered Canadian exporters until now.<\/p>\n Canadian minister responsible for US trade relations Dominic LeBlanc and chief trade negotiator Janice Charette stayed in Washington over the weekend trying to narrow the gap before the deadline. Still, LeBlanc told an advisory committee that both sides remain far from a draft agreement despite frequent meetings. Prime Minister Mark Carney has maintained that his government has put forward comprehensive proposals to resolve the trade disputes, and has argued that Trump’s earlier tariffs violated the USMCA.<\/p>\n Canada Increasingly Sidelined From the USMCA Review<\/p>\n The hardened stance toward Ottawa is not happening in isolation: it comes as the United States and Mexico move ahead with bilateral rounds of the USMCA review without Canada at the table. According to\u00a0Mexico Business News<\/a>, Economy Minister Marcelo Ebrard has publicly urged Canada to join those negotiations, stressing that both countries share an interest in preserving tariff-free access to the US market, even as Ottawa remains largely absent from the working sessions.<\/p>\n