{"id":202191,"date":"2026-09-09T16:31:08","date_gmt":"2026-09-09T16:31:08","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/202191\/"},"modified":"2026-09-09T16:31:08","modified_gmt":"2026-09-09T16:31:08","slug":"trumps-trade-war-with-canada-is-increasingly-reliant-on-a-disputed-95-year-old-tariff-law","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/202191\/","title":{"rendered":"Trump’s trade war with Canada is increasingly reliant on a disputed 95-year-old tariff law"},"content":{"rendered":"\n

President Trump is escalating his trade war with Canada, doubling down on a 95-year-old law to potentially ban Canadian dairy products, most alcoholic beverages, and motorcycles<\/a>. <\/p>\n

“It seemed inevitable that Trump would need to have the last word,” Capital Economics said in a note, “and the administration has responded by leaning on another part of Section 338.” <\/p>\n

That’s a provision from the Tariff Act of 1930, which was signed by President Herbert Hoover. Trump has cited that authority for his latest actions, though the law is often cited as the literal textbook example of tariffs gone wrong<\/a>.\u00a0 <\/p>\n

More widely known as the Smoot-Hawley Tariff Act, it raised effective US tariff rates in the early 1930s into the double digits, leading to a trade war with Canada and others and a fall in imports, which economists agree worsened the Great Depression a few years later. <\/p>\n

But beyond the inconvenient historical parallel \u2014 Trump has often recoiled at being compared to Hoover \u2014 a more pressing concern for the president will likely be whether the authority is legal.\u00a0 <\/p>\n

\"WASHINGTON,<\/a> President Trump is seen after speaking during a “Steel Across America” event near the White House on Tuesday. (Andrew Harnik\/Getty Images) \u00b7 Andrew Harnik via Getty Images <\/p>\n

Some legal experts think that this presidential authority was superseded by subsequent laws and could therefore be nullified in the courts. <\/p>\n

Trump has invoked a “zombie statute,” said Alan Wolff of the Peterson Institute of International Economics,<\/a> setting “a new record for lack of credibility.” <\/p>\n

“The courts should reject these tariffs as patently illegal,” he added. <\/p>\n

Philip Zelikow, an attorney and former career diplomat now at the Hoover Institution, has similarly argued that this tariff authority isn’t legal<\/a> because the law is “long dead” and was intended to be replaced by subsequent tariff laws. <\/p>\n

It was “effectively repealed and superseded by section 252 of the Trade Expansion Act of 1962,” he recently argued. <\/p>\n

These legal questions have led to a widespread assumption in trade circles<\/a> that Trump’s authority could be in for legal scrutiny<\/a> in the months ahead, especially given the Trump administration’s mixed tariff record in the courts. <\/p>\n

The centerpiece of Trump’s previous tariffs relied on the International Economic Powers Act of 1977 and was struck down by the Supreme Court in February.<\/a> His follow-up move to temporarily impose tariffs under Section 122 of the Trade Act of 1974 led the US Court of International Trade to rule that Trump’s team misinterpreted that law and ordered that those tariffs “shall be refunded with interest as provided by law.”\u00a0 <\/p>\n

That ruling was paused and remains under appeal. <\/p>\n

Read more:\u00a05 ways to tariff-proof your finances<\/a> <\/p>\n

\"The<\/a> The US and Canadian flags wave during the Major League Soccer match on Sept. 5. (Jack Megaw\/NurPhoto via Getty Images) \u00b7 NurPhoto via Getty Images ‘Section 338 authorizes the President’ <\/p>\n

Trump first turned to Section 338 this summer as a way to strike quickly, with the imposition of 50% tariffs<\/a> against Canada on an array of goods.\u00a0 <\/p>\n

When Canada retaliated, Trump’s response this week has hinged on the same authority. <\/p>\n

“Section 338 authorizes the President, if he determines it will serve the public interest, to offset any burden or disadvantage placed on the commerce of the United States by an unequal imposition or discrimination by a foreign country,” one of this week’s orders read. <\/p>\n

Trump’s team has prioritized 338 duties in large part because they can be enacted quickly, in contrast to other, more durable but slower-acting authorities. <\/p>\n

The law also allows the president to impose bans, raising its prominence in White House planning. <\/p>\n

A senior administration official told reporters Tuesday that the law “permits the president to ban these products if a country remains or fails to change its discriminatory conduct toward that country.” <\/p>\n

Indeed, Trump has recently embraced the idea of outright bans on goods<\/a>, telling reporters recently he is under “no obligation” to trade with Canada or other nations. <\/p>\n

\"Canadian<\/a> Canadian Prime Minister Mark Carney arrives for a news conference in Quebec on Aug. 24. (Andrej Ivanof\/AFP via Getty Images) \u00b7 ANDREJ IVANOV via Getty Images <\/p>\n

Yet the actions announced this week are far less sweeping, with Capital Economics estimating that the proposed bans cover only 0.25% of Canada’s exports to the US.\u00a0 <\/p>\n

The bans aren’t scheduled to take effect until Sept. 29, while talks between Canada and the US are expected to continue in the weeks ahead. <\/p>\n

For the moment, Section 338 tariffs represent only a fraction of Trump’s tariffs and are behind 0.29% of the overall effective tariff rate of 11.27%, according to the Yale Budget Lab<\/a>. <\/p>\n

The lion’s share of Trump’s tariffs are those levied under Section 232 of the Trade Expansion Act of 1962 (focused on national security) and Section 301 of the Trade Act of 1974 (focused on unfair trade rules). <\/p>\n

Ben Werschkul is a Washington correspondent for Yahoo Finance. <\/p>\n

Click here for political news related to business and money policies that will shape tomorrow’s stock prices<\/a> <\/p>\n

Read the latest financial and business news from Yahoo Finance<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"President Trump is escalating his trade war with Canada, doubling down on a 95-year-old law to potentially ban…\n","protected":false},"author":2,"featured_media":202192,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[17,54659,681,63560,5854,400,437],"class_list":["post-202191","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-canada","tag-capital-economics","tag-getty-images","tag-president-herbert-hoover","tag-president-trump","tag-tariffs","tag-trade-war"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/202191","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=202191"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/202191\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/202192"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=202191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=202191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=202191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}