Trump has announced to impose 50 percent tariff on Canada.
US President Donald Trump on Monday imposed a 50 percent tariff on most Canadian goods. He said Canada has treated American vehicles, liquor and dairy products unfairly. This step could start a new phase of economic turmoil. This threatens to increase inflation and worsen relations between the two countries, whereas these relations were quite strong before Trump returned to the White House. An administration official briefed on the move said Canada was the only country other than China to respond to Trump’s previous tariffs, so it should be held accountable.
Speaking to reporters to brief the president on his actions, the official, who spoke on condition of anonymity, said Trump signed three orders to implement tariffs under Section 338 of the Trade Act of 1930. Last year, many Democratic lawmakers proposed eliminating this section because they said Trump could use it to destabilize the economy.
The new 50% tariff will exclude energy products, potash, fish and essential minerals, but will include goods that were previously exempt from import taxes under the United States-Mexico-Canada Agreement (USMCA). The US did not renew the 2020 trade agreement, opening a new round of negotiations that could last until 2036. The White House said in a fact sheet that the tariffs would take effect in 30 days, meaning there is time for negotiations because Trump has not always implemented the tax increases he has announced on imports.
Canada is at risk of a major trade war
According to experts, these tariffs can turn into a big trade war because Canada is trying to save its economy. Canada’s federal government had no immediate comment on the tariffs, but Ontario Premier Doug Ford warned of further confrontation. Ford wrote on social media that if these tariffs are implemented, Canada should respond with tariff for tariff and dollar for dollar.
Candice Lange, CEO of the Canadian Chamber of Commerce, said the Trump administration’s actions are “regrettable” but that both countries should use the 30 days before the tariffs go into effect to “make meaningful progress in moving forward with formal negotiations.” Scott Lincicome, vice president of general economics at the Cato Institute, a libertarian think tank, said the tariffs threaten not only Canada but America’s other trading partners and create “a lot of uncertainty” in the global economy.
Linsicom said that we have taken a step from which there can be no retreat. Using 338 is like a ‘nuclear option’ for Trump’s tariffs. Tariffs are also a political challenge for Trump. The new tariffs pose serious political and economic risks to Trump ahead of the November midterm elections for control of Congress. In April last year, his “Liberation Day” tariffs caused a sharp decline in the financial markets due to fears of inflation and recession, after which he had to negotiate to reduce the rates for some time.
When the Supreme Court gave its decision
In February this year, the Supreme Court ruled that Trump did not have the legal authority to declare an economic emergency and impose tariffs. After this, the administration had to find other ways to increase the import tax on the basis of various legal rights. Tariffs are taxes imposed on imports, the burden of which companies can pass on to customers in the form of higher prices. The President says that the costs of tariffs will cause manufacturing to shift to the US, although there is little evidence of this in economic data.
Recent import taxes could worsen Trump’s weak rating on the economy. During his presidential election, he promised voters that he would lower prices, but since he became president, inflation has increased annually because of oil prices rising due to tariffs and the war in Iran.
Carney and Trump watched the final together
Trump has repeatedly targeted Canada on trade-related issues. A Trump administration official said the President had also asked his aides to consider the possibility of imposing additional tariffs on Canada because the fires there worsen air quality in the US. He had also publicly threatened to do so in a social media post. During the World Cup final on Sunday, Trump watched the match with Canadian Prime Minister Mark Carney. Carney has openly challenged the US President and tried to increase Canada’s trade relations with other countries.
The Trump administration official said their meeting during the match was not a working visit to discuss trade and tariffs. Trump has claimed in his orders that Canada discriminates against American vehicles, liquor and cheese compared to other countries. But their argument is largely based on Canada’s retaliatory actions taken when the US President imposed tariffs on Canada, saying it should do more to stop fentanyl trafficking.
automobile related order
Trump said in his order related to automobiles that from April 2025, Canada imposed a 25% tariff on imports of vehicles made in America, which did not meet the conditions for special exemption under the USMCA. The White House said that in the case of alcohol, all but two provinces and territories of Canada had stopped buying and selling American alcohol since last year. This step was taken in response to Trump’s tariffs and his talk of making Canada the 51st state of America.
