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US President Donald Trump has announced plans to impose 50% tariffs on most Canadian goods, including wine, cheese and other food and beverage products, escalating trade tensions between the two neighbouring countries.
The White House said the tariffs were being introduced in response to what it described as Canada’s unfair discrimination against US products, including American cars, alcohol and dairy.
The new tariffs are set to come into effect in 30 days, leaving a window for further negotiations between the US and Canada.
A wide range of Canadian goods will be affected, with the measures also applying to some products previously protected from import duties under the United States-Mexico-Canada Agreement (USMCA).
However, energy products, fish, critical minerals and potash will be excluded from the new tariffs. Goods already subject to tariffs introduced on national security grounds, including steel and aluminium, will also be exempt.
The proclamation signed by the Trump administration states that Canada discriminates against US automobiles, alcohol and cheese compared with other countries. However, much of the argument is based on retaliatory measures introduced by Canada after the US imposed its own tariffs, initially citing concerns over fentanyl smuggling.
It also cited restrictions on the sale of US alcoholic beverages, with all but two Canadian provinces and territories having stopped selling American alcohol while not imposing similar restrictions on products from other countries.
Trump also criticised Canada’s treatment of US cheese, claiming that the country discriminates against American dairy products compared with European imports.
Canadian Prime Minister Mark Carney said the country had already made comprehensive proposals to resolve trade disputes with Washington, arguing that previous US tariffs had violated the countries’ trade agreement.
The latest measures are expected to increase concerns over inflation and economic disruption, while further straining relations between two economies that have historically been closely integrated.
The new tariffs could also carry political risks for Trump ahead of the November midterm elections, which will determine control of Congress. His so-called ‘Liberation Day’ tariffs introduced last April triggered significant financial market turmoil amid concerns over inflation and recession, before the administration temporarily reduced some rates to allow for negotiations.
The administration has also been forced to seek alternative legal routes for imposing tariffs after the Supreme Court ruled in February, in a 6-3 decision, that Trump had unlawfully used emergency executive powers to introduce global tariffs.
The US has so far been ordered to repay $81 billion in tariffs during the current fiscal year, adding further pressure to the administration’s trade policy.