Reshma Kapadia

The Trump administration on Monday threatened to impose 50% tariffs on neighbor Canada, effective in 30 days, citing discriminatory treatment of U.S. exports including alcohol, autos, and dairy.

The White House said it would impose tariffs on goods ranging from hockey sticks to cement, and these levies would also apply to goods covered under the U.S.-Mexico-Canada trade pact that have been excluded in other tariff actions. The U.S. outlined only limited exemptions for energy, critical minerals, potash, fish, and products subject to sectoral Section 232 tariffs.

"The scale of these threatened Canada tariffs is significant," says Ryan Majerus, a partner at King & Spalding and former U.S. trade official, noting that last year's global tariffs allowed for carve-outs for goods covered under USMCA.

Tensions between the U.S. and Canada have been high as the countries with Mexico renegotiate the U.S.-Mexico-Canada trade pact. While the U.S. has had several formal negotiations with Mexico, it hasn't done so with Canada.

Doug Ford, the premier of Ontario, on X said that if the tariffs proceed, "Canada should respond tariff for tariff, dollar for dollar." A spokesman for the Canadian government didn't immediately respond to a request for comment.

Owen Tedford, an analyst at Beacon Policy Advisors, is skeptical these tariffs will actually be imposed, noting threats in recent months that haven't seen follow-through. That said, he does expect them to be used as leverage in ongoing USMCA negotiations.

But trade experts noted the use of a Smooth-Hawley era vehicle for these duties -- Section 338 of the Trade Act of 1930. "The use of 338 in this way suggests that the White House still believes it can threaten tariffs, with minimal procedural steps, similar to the way it did under International Emergency Economic Powers Act [which the Supreme Court ruled against earlier this. year]," Tedford says.

The administration has been looking for ways to rebuild tariffs after the court ruled the IEEPA tariffs illegal. Tedford expects levies under Section 338 to also be challenged.

Write to Reshma Kapadia at reshma.kapadia@barrons.com

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July 20, 2026 18:09 ET (22:09 GMT)

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