Trump Imposes 50% Tariffs on About $20 Billion of Canadian Goods, Reviving a 1930 Law

President Donald Trump signed three proclamations on July 20 and 21 imposing an additional 50% tariff on a broad set of Canadian imports, covering motor vehicles, wine and other alcohol, dairy products such as milk and cream, cement, furniture, fishing rods, seeds, clothing, wigs and hockey equipment. The White House put the affected trade at roughly $20 billion and exempted energy, potash, fish, critical minerals and goods already covered by separate national-security duties. The measures take effect on August 19, leaving a window of about 30 days.

The administration used Section 338 of the Tariff Act of 1930, which lets the president add duties of up to 50% on a country found to discriminate against United States commerce. It is the first known use of the provision in nearly a century, its last documented application dating to 1949. Trump cited Canadian barriers to American autos, alcohol sold through provincial liquor boards, and dairy under Canada's supply-management quotas. Legal advisers noted the section overrides the exemptions Canadian goods would otherwise carry under the United States-Mexico-Canada Agreement (USMCA), so even compliant products are covered.

The move follows a February ruling in which the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) did not authorize the president's earlier tariffs, pushing the administration toward Section 338 as an untested alternative that trade lawyers expect to face challenge.

Prime Minister Mark Carney disputed the discrimination claim and called the tariffs a unilateral action that violates the trilateral trade pact. He said Canada had submitted detailed proposals to modernize the agreement and, after speaking with Trump on Tuesday, that the two had agreed to intensify negotiations, while warning he would consider all options if the duties proceed. The Canadian Chamber of Commerce called the step a regrettable escalation. The Canadian dollar fell to a one-week low near 1.41 per US dollar as investors trimmed expectations for Bank of Canada rate increases.