US President Donald Trump has imposed a 50% tariff on many goods from Canada, in retaliation for what he called “unequal treatment” of US cars, milk and alcohol.
The duties take effect within 30 days and mark a major escalation in trade tensions between the North American neighbors.
The White House said the tariffs are necessary to protect American businesses.
Targeted goods range from everyday items such as wine and hockey sticks to industrial goods such as commercial cement. However, several important exports will end, such as energy, potash, precious minerals and fish.
The new duties apply to all covered goods regardless of whether the product is included under the existing free trade agreement between Canada, the US and Mexico, known as the USMCA.
Monday’s tariffs build on existing trade barriers between the two nations.
The US has been maintaining effective tariffs ranging from 15% to 50% on Canadian steel, aluminum and copper. Washington also imposes a 35% tariff on Canadian softwood lumber, and a 25% tariff on non-US auto parts.
Canada has its own counter-tariff of 25% on selected imports of American steel, aluminum and automobiles.
Monday’s actions come after President Trump threatened to impose tariffs on Canadian wildfire smoke pouring into American cities.
But there is no mention of wildfires in the executive order signed by Trump on Monday.
Instead, the three announcements list previously known US trade irritants in Canada related to automobiles, milk and alcohol – indicating disruption of trade negotiations between the two countries.
On cars, Trump accused Canada of imposing tariffs on US cars and parts not covered under the USMCA.
He says it is “absurd” that Canada discriminated against the US by not charging other countries the same tax.
Automobile production in North America is highly concentrated between Canada, the US and Mexico.
But Trump’s Commerce Secretary, Howard Lutnick, said he believes Canada should be “second best” to the US.
Trump has also mentioned cars in the past as one issue where these countries compete.
Milk, on the other hand, has long been a problem in the US, especially the Canadian export control system, which imposes restrictions on imports. Those who exceed the limit are taxed at over 300%.
Finally, the continued boycott of US alcohol by many Canadian provinces has become a major concern for Americans since it was imposed last year.
Canadian prime ministers have repeatedly said the boycott will be lifted if the US lifts its tariffs on key Canadian sectors, including metals and autos.
Canadian trade negotiators have been working to try to find a deal that would reduce at least some of the current US tariffs.
The BBC has contacted the White House and the Canadian government for comment.
In February, the US Supreme Court struck down international tariffs imposed by Trump through the International Monetary Fund Act of 1977.
The judges ruled that the president exceeded his authority when he declared the jobs under the law reserved for national emergencies.
The White House vowed at the time to use other measures to impose tariffs on imports.
Monday’s actions were introduced under Section 338 of the Tax Act of 1930, which classifies trade discrimination as a national emergency.
Candance Laing, head of the Canadian Chamber of Commerce, called the move a “regrettable decision”, but urged officials to make “significant progress” in negotiations before the new jobs take effect in 30 days.
Chris Swonger, head of the Distilled Spirits Council of the United States, also called on both sides to find a solution to their dispute, warning the decision “exacerbates trade tensions and increases the risk of further retaliation”.
Earlier this year, the US chose not to renew the USMCA in its current form.
Canada and Mexico have asked for the renewal of the agreement, but the US wants to make changes to the agreement, which was negotiated during Trump’s first term.
As it stands, this agreement will continue to govern North American trade for the next ten years on an ongoing, year-by-year basis, requiring annual review.
