2 weeks ago
Trump threatens 50% tariffs on $20 billion of Canadian goods
The United States and Canada are close neighbours that trade lots of goods with each other every day.
The American president, Donald Trump, says he will charge a big tax, called a tariff, on about $20 billion worth of things Canada sends to America.
This tax could start very soon, on Wednesday morning.
A tariff makes imported goods more expensive, so shoppers might see higher prices.
The US says it wants fairer trade and also wants Canada to buy American fighter jets and help with a missile defence programme.
Canada says it wants the US to remove taxes on steel, aluminium, and wood.
The two leaders are talking to try to reach a deal before the new taxes begin.
People on both sides say they do not really want the tariffs to happen.
If no deal is made, goods could become more expensive for Canadians and Americans alike.
President Donald Trump plans to impose 50% tariffs on about $20 billion of Canadian products, with duties potentially taking effect at 12:01 am Wednesday.
The tariffs would be imposed under Section 338 of the Tariff Act of 1930, which allows duties of up to 50% without an investigation.
The US is demanding Canada buy more military equipment including F-35 fighter jets, join the Golden Dome missile defence programme, and grant greater access to critical minerals.
Canada wants the US to reduce or remove tariffs on steel, aluminium, and softwood lumber as part of any deal.
Canada sends about 72% of its goods exports to the US, and a petition seeking removal of US Ambassador Pete Hoekstra has nearly 218,000 signatures.
- Who
- US President Donald Trump, US Trade Representative Jamieson Greer, and Canadian Prime Minister Mark Carney.
- What
- The US plans to impose 50% tariffs on about $20 billion of Canadian products under Section 338 of the Tariff Act of 1930 unless a deal is reached.
- Where
- The United States and Canada, the two countries connected by the 5,525-mile shared border.
- When
- The new duties could take effect at 12:01 am Wednesday; negotiations were ongoing on Monday.
- Why
- The US wants Canada to buy more US military equipment, join the Golden Dome missile defence programme, and grant access to critical minerals, while Canada wants relief from US steel, aluminium, and softwood lumber tariffs.
US View
Canada/Critics View
Tariff justification
US View
The US says Canada discriminates against American exports of automobiles, alcohol, and cheese, so Section 338 tariffs are justified.
Canada/Critics View
Canada argues that making further concessions without getting something meaningful in return would make it look weak and vulnerable to future trade and geopolitical bullying.
USMCA renegotiation
US View
The US sees the tariff threat as leverage while the US-Mexico-Canada Agreement is being renegotiated.
Canada/Critics View
Canada needs USMCA renegotiated but cannot do so with a massive trade war going on.
Use of Section 338
US View
Section 338 lets the president act without an investigation, with no fixed limit on how long tariffs can stay in place.
Canada/Critics View
Economists and historians have long criticised Smoot-Hawley tariffs for restricting international trade and worsening the Great Depression.
Key facts
- Tariff rate
- 50%
- Goods affected
- About $20 billion of Canadian products
- Potential effective date
- 12:01 am Wednesday
- Legal basis
- Section 338 of the Tariff Act of 1930 (Smoot-Hawley Tariff Act)
- Canadian exports to US
- Nearly 72% of Canadian goods exports last year
- Key US demands
- F-35 jet purchases, Golden Dome participation, critical minerals access
- Key Canadian demands
- Relief from steel, aluminium, and softwood lumber tariffs
- Petition signatures
- Nearly 218,000 seeking removal of US Ambassador Pete Hoekstra
Quotes
Prime Minister Mark Carney
Prime Minister of Canada
“"The negotiations are very intense and delicate. This is not the time to talk about negotiations in public," Carney said in French.”
financialexpress.com
Ryan Majerus
Partner at law firm King & Spalding and former U.S. trade official
“"I don’t think either side really wants these tariffs to come into effect. There’s a pretty strong push on both sides to find an off‑ramp here."”
financialexpress.com
U.S. Trade Representative Jamieson Greer
U.S. Trade Representative
“"If a country retaliates against us, we’re obviously not going to tolerate that."”
financialexpress.com
Sources
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