en.Wedoany.com Reported - The White House signed three executive trade actions imposing 50% tariffs on Canadian alcohol, dairy products, and automobiles (including those compliant with the United States-Mexico-Canada Agreement, USMCA), marking another escalation in the ongoing trade dispute between the Trump administration and Canada.
According to a White House fact sheet, the three announcements provide exemptions for potash (a key fertilizer ingredient), fish, and critical minerals. The tariffs will take effect in 30 days. U.S. Trade Representative Jamieson Greer stated in a release that President Trump took decisive action to hold Canada accountable for its retaliatory and discriminatory practices, fulfilling his commitment to correct trade imbalances and ensure fairness for American workers, farmers, and businesses.
Trump has repeatedly used the International Emergency Economic Powers Act (IEEPA) and Section 122 of the Trade Act of 1974 to impose tariffs on Canada, both of which have faced legal challenges. This time, the administration chose to use a Depression-era authority—Section 338—which allows the president to impose tariffs of up to 50% on countries that discriminate against the U.S. or unreasonably burden U.S. commerce. A senior administration official stated at a press briefing that Section 338 has never been used for this purpose before, similar to IEEPA and Section 122.
Greer said in the statement that this action was necessary due to Canada's retaliatory measures. He noted that while the administration continues to seek fair and reciprocal trade agreements, Canada persists in retaliating against U.S. efforts to rebalance trade and protect American industries in national security-sensitive sectors.
Under IEEPA, the administration imposed 35% tariffs on most Canadian goods not covered by USMCA and 10% on potash. The Supreme Court overturned these tariffs in February, prompting the administration to shift to a 10% global tariff under Section 122, which expires on July 24. The president has also imposed multiple tariffs under Section 232 on steel, aluminum, automobiles, and lumber. Section 338 tariffs exempt products already subject to Section 232 tariffs.
Canada's response to the administration's trade actions has primarily involved removing U.S. alcohol products from shelves. The official stated that all Canadian provinces and territories, except Alberta and Saskatchewan, have stopped purchasing, distributing, or retailing U.S. alcoholic beverages. The White House alcohol announcement noted that since March 2025, all Canadian provinces and territories had ceased related activities, with only the two aforementioned provinces lifting the ban in June 2025.
The official also highlighted Canada's restrictions on U.S. cheese trade. Canada maintains a tariff-rate quota allowing a certain amount of U.S. cheese to enter duty-free under USMCA. According to data from the University of Wisconsin-Madison, without the tariff-rate quota, U.S. producers would face a tariff rate of approximately 245%. USMCA has similar provisions for other dairy products. The U.S. dairy industry has long argued that Canada has not complied with the agreement's terms. The official stated that the tariff-rate quota for U.S. cheese is more restrictive than that for the European Union.
The White House dairy announcement stated that by making the USMCA tariff-rate quota for all types of cheese unavailable to retailers, Canada discriminates against U.S. goods similar to EU products entering under the Comprehensive Economic and Trade Agreement (CETA), denying the U.S. the preferential treatment it grants the EU. The official also raised issues regarding Canadian tariffs and quotas on imported automobiles.
The latest tariff actions come days after Trump threatened to impose tariffs on Canada over wildfire smoke. Trump stated on Truth Social on July 17 that due to Canada's failure to properly manage its forests, the U.S. is being invaded by polluted air, and the cost of this pollution must be added to the tariffs Canada pays. The official said the Section 338 tariffs are unrelated to wildfires, but the administration is exploring options for imposing such tariffs.
