President Donald Trump imposed 50% tariffs on most Canadian goods Monday, citing what he called unfair discrimination against American autos, alcohol, and dairy products.
Trump signed three proclamations invoking Section 338 of the Tariff Act of 1930, a rarely used legal authority that grants the president power to impose maximum tariffs on discriminatory trading partners.
The new tariffs are structured across three separate proclamations, each covering a different set of Canadian imports ranging from wine and hockey sticks to cement.
All covered goods are subject to the new rate regardless of whether they qualify under the U.S.-Mexico-Canada Agreement, though energy, potash, critical minerals, and fish are explicitly excluded.
The 50% rate is set to take effect in 30 days, giving businesses a narrow window to adjust before the full economic impact begins to register.
Although Section 338 has existed since the 1930 Tariff Act, officials acknowledged it has never been deployed in this manner before, raising the prospect of significant legal challenges to the tariffs.
The move follows a period of sharp deterioration in bilateral trade flows, with Canadian imports of U.S. alcoholic beverages falling roughly 81%, or $582 million, between March 2025 and February 2026 compared to the prior year.
Canadian imports of U.S. motor vehicles declined approximately 22%, or $5.6 billion, over the same stretch, figures the White House cited as direct evidence of discriminatory trade practices.
On dairy, Canada’s tariff-rate quotas on U.S. cheese were described as more restrictive than those applied to similar European Union imports, despite Canada holding trade agreements with both the U.S. and the EU.
U.S. Trade Representative Jamieson Greer said Trump took “decisive action to hold Canada accountable for its retaliation and discrimination,” framing the tariff escalation as a response to Canadian policy choices rather than an opening negotiating move.
The White House noted that only two countries have chosen to retaliate against Trump’s tariffs rather than negotiate a deal: China and Canada, signaling deepening frustration with Ottawa’s posture.
Relations between Trump and Canadian Prime Minister Carney have been notably cold, with Carney having won the premiership on a platform of standing up to American economic pressure.
At the World Economic Forum in Davos in January, Carney said without naming Trump that the “most powerful” countries are using the economy to coerce less powerful nations.
The tariff announcement arrives as negotiations over amendments to the existing North American trade pact remain stalled, with the Trump administration already signaling it would not renew the agreement in its current form.
Greer is scheduled to travel to Mexico this week for separate trade talks, underscoring how Washington is pursuing parallel and distinct negotiating tracks with its two closest continental neighbors.
