other goods subject to the tax<\/a> include honey, seeds and agricultural products \u2014 as well as select makeup, perfumes, clothing, jewelry, furniture, cameras, fabric and more.<\/p>\nThe 50% levy also applies to some products that were previously protected under the U.S.-Mexico-Canada Agreement, a trade pact from Trump\u2019s first term. That marks a shift from past levies \u2014 and further underlines questions around the future of the USMCA overall.<\/p>\n
How is Trump imposing these tariffs?<\/p>\n
To impose these tariffs, Trump reached back to a long-dormant Great Depression-era law: Section 338 of the Tariff Act of 1930.<\/p>\n
When the U.S. and world economies were in collapse nearly a century ago, Congress passed the 1930 law as part of broader Smoot-Hawley legislation, named after its congressional sponsors. The act raised tariffs more generally across the board and became notorious among economists for limiting world commerce and making the Great Depression worse. But Section 338 \u2014 which authorizes the president to impose taxes of up to 50% on imports from countries deemed to have discriminated against U.S. businesses \u2014 has never been used specifically to raise tariffs until now.<\/p>\n
No investigation is required to justify the levies. Nor is there any limit on how long they can stay in place. Since there\u2019s no precedent, however, the latest tariffs may also see more legal challenges.<\/p>\n
When announcing his planned tariffs last month, Trump claimed that Canada was unfairly discriminating against U.S. exports of automobiles, alcohol and dairy products. The president expressed anger over Canada\u2019s retaliation against his tariffs last year \u2014 noting Canadian imports of American alcohol and cars started to fall last spring.<\/p>\n
Canada\u2019s retaliation<\/p>\n
Canada\u2019s Carney quickly promised to match the new levies \u201cdollar for dollar,\u201d later announcing retaliation would begin Sept. 8. He noted the tariff increases would target U.S. steel, dairy, appliances, agricultural equipment, pulp and paper and electronics.<\/p>\n
The prime minister said Canada was willing to drop remaining retaliatory tariffs on steel, aluminum and autos if the U.S. substantially lowered its own, and to encourage provinces to restore U.S. alcohol sales. But eventually, he said Washington\u2019s final demands went too far.<\/p>\n
Carney accused Washington of using \u201ceconomic integration as a weapon\u201d and said Canada had been \u201cattacked\u201d via the latest U.S. tariffs. He said his country had the reserves and resilience to respond.<\/p>\n
Trump\u2019s top trade negotiator, Jamieson Greer, pledged additional measures to respond to Canada\u2019s retaliation, without immediately specifying what that would look like. In a Saturday interview with \u201cFox & Friends Weekend,\u201d Greer also claimed the administration offered to cut tariffs on steel, autos and lumber but Canada \u201cdidn\u2019t want\u201d the deal.<\/p>\n
What\u2019s next?<\/p>\n
Tariffs are taxes paid by importers, or businesses that buy goods from abroad. That typically trickles down to consumers through higher prices \u2014 and, as seen over the last year, can also create uncertainty for workers across affected sectors.<\/p>\n
North America now has a \u201cnew tariff landscape,\u201d Dave Townsend, a partner at law firm Dorsey & Whitney, said Saturday. He noted a big question is whether the latest levies prove to be temporary.<\/p>\n
The 50% tariffs come on top of previously imposed levies, including a 10% rate Trump imposed on Canada just last month, ostensibly for failing to do enough to block imports produced by forced labor, and separate sectoral levies affecting trading partners globally.<\/p>\n
The growing trade sanctions on Canada underscore Trump\u2019s willingness to risk breaking established alliances. And Canada\u2019s reluctance to accept a deal may reflect recent experience. <\/p>\n
Trump has repeatedly targeted Canada, even after instances in which it made concessions following his demands. Some tolls on the newly opened Gordie Howe Bridge will be shared for 15 years, despite the fact that Canadians paid for the span linking Detroit and Windsor. <\/p>\n
Canada also withdrew a digital services tax last year. All the while, Trump has threatened more tariffs over events that angered him, including a TV ad criticizing his trade policies (later pulled by Ontario\u2019s government) and Canadian wildfires whose smoke blackened skies over parts of the United States. <\/p>\n
Steeper tariffs have already contributed to higher inflation \u2014 but the effective tariff rate appeared to have leveled off some in recent months, according to researchers<\/a> at the Federal Reserve Bank of St. Louis, notably after the Supreme Court in February struck down Trump\u2019s most sweeping levies.<\/p>\nStill, Saturday\u2019s taxes against Canada mark the latest instance of Trump turning to other laws to impose tariffs. And more recently, Washington\u2019s war with Iran has driven prices even higher. With the cost of living at the center of many voters\u2019 minds in a midterm election year, political ramifications could mount for the Republican president in the coming months.<\/p>\n
Grantham-Philips writes for the Associated Press. AP writers Paul Wiseman in Washington and Rob Gillies in Toronto contributed to this report. <\/p>\n","protected":false},"excerpt":{"rendered":"CHICAGO\u00a0\u2014\u00a0After trade negotiations collapsed at the eleventh hour, President Trump\u2019s 50% tariffs on scores of Canadian imports kicked…\n","protected":false},"author":2,"featured_media":180524,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[57226,17,55434,1644,16254,57228,38990,31093,10840,3837,6339,57227,28,2878,3211],"class_list":["post-180523","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-agricultural-product","tag-canada","tag-canadian-import","tag-country","tag-dollar","tag-high-price","tag-last-year","tag-president","tag-retaliation","tag-saturday","tag-tariff","tag-taxis","tag-trump","tag-u-s","tag-washington"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/180523","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=180523"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/180523\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/180524"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=180523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=180523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=180523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}