Trump to impose 50% tariffs on Canadian goods, escalating North America trade dispute

The United States will impose an additional 50 per cent tariff on a range of Canadian goods from next month, the Trump administration announced on Monday (July 20), marking a sharp escalation in an increasingly fraught trade dispute between the two North American neighbours.

The new duties will apply to products including hockey sticks, wine and cement. US officials accused Canada of discriminating against American exports, saying the measures are a response to what Washington views as unfair trade practices.

The tariffs will be introduced under Section 338 of the Tariff Act of 1930, a legal authority that has never before been used. A senior administration official said the move is separate from the wildfire-related tariffs that President Donald Trump had threatened earlier, although those options remain under consideration.

Administration officials argued that Canada is one of only two countries, alongside China, to retaliate against earlier Trump tariffs. They pointed to decisions by several Canadian provinces to remove American liquor from store shelves, as well as automotive policies that they claim favour domestic production. Officials also criticised Canada's dairy regulations, arguing they give European cheese producers an advantage over US exporters.

The latest announcement follows Trump's warning last week that additional tariffs could be imposed on Canada, citing costs associated with wildfire smoke drifting into the United States.

Trump and Canadian Prime Minister Mark Carney were seen together at the FIFA World Cup final in East Rutherford, New Jersey, on Sunday. Speaking to reporters afterwards, Trump said the pair had discussed possible action related to the wildfires while describing their relationship as "good".

The latest tariffs further deepen tensions after the Trump administration declined to extend the US-Mexico-Canada Agreement (USMCA), leaving the future of the continent's trade framework uncertain.

Unlike previous Trump-era tariffs on Canadian imports, the new duties will also apply to goods that would normally qualify for duty-free treatment under the USMCA. Economists have previously said the agreement has played a key role in shielding consumers from higher prices caused by tariffs.

However, the administration has exempted several strategically important Canadian exports, including potash, critical minerals and most energy products, limiting the potential impact on key US industries.