Fresh 50% US tariffs mount pressure on Canada

The latest US tariffs on certain Canadian goods are being viewed by experts as both a negotiating tactic and a shift in the US administration's legal strategy for pressuring Canada.

US President Donald Trump on Monday announced a new 50 percent tariff on certain Canadian goods, including wine, hockey sticks and cement.

The White House said the move was intended to address what it described as discriminatory Canadian trade policies, including restrictions on US alcohol sales, dairy supply management and automobile import quotas.

Canadian Prime Minister Mark Carney condemned the move, calling it "the latest in a series of unilateral US trade actions" that began with Washington imposing tariffs "in direct violation" of the agreement between Canada, the United States and Mexico.

"Canada stands ready to engage intensively to address outstanding issues with the US to the mutual benefit of our citizens," Carney said in a statement.

Ontario Premier Doug Ford urged Ottawa to respond forcefully.

Trade experts said the latest measures reflect both a shift in the legal tools employed by the Trump administration and a broader effort to increase pressure on Canada amid stalled trade negotiations.

Dave Townsend, a partner in Dorsey & Whitney LLP's International Trade Group, said the administration's latest action differs from earlier tariff measures.

"Today, the Trump administration announced tariffs on nearly $20 billion worth of annual imports from Canada under a different legal authority, Section 338. The tariffs would take effect 30 days from now. Why now against Canada?" Townsend said.

He said the timing appears closely linked to ongoing negotiations between Washington and Ottawa.

"The new potential tariffs on goods from Canada appear to be because Canada has thus far not agreed to a framework trade agreement with the United States.

"Thus, the higher tariffs for goods from Canada appear to be aimed at encouraging an agreement between Canada and the United States, or in retaliation for the failure to reach such an agreement, or both," Townsend said. He said the latest measures could further strain trade relations.

Cycle of escalation

"The question now is whether the two sides can reach such an agreement or whether a cycle of escalation and retaliation takes hold between the two countries," he said.

Ronald Stagg, a history professor at Toronto Metropolitan University, said the administration's latest move also marks a significant change in the legal basis for imposing tariffs.

"Having run into problems with duties imposed under 1974 and 1962 trade acts, Trump has now reached back to the 1930 act, which resulted in the deepening of the Great Depression, as other countries retaliated by raising tariffs," Stagg told China Daily.

Stagg said the announcement appeared to catch many in Canada by surprise.

"This seems to have come as a surprise to the Canadian government, and the media, which were focused on Trump's musings on the imposition of tariffs or other financial penalties on Canada for allowing smoke from wildfires to enter the United States," he said.

Only days before announcing the new tariffs, the Trump administration threatened additional financial penalties against Canada over wildfire smoke drifting across the border, accusing Canada of failing to properly manage its forests.

Stagg said the latest actions reflect a broader pattern in Trump's approach.

Looking ahead, Stagg said Canada's response will be critical.

"The question now is, will Canada retaliate, or will the Canadian government complain, but try not to poke the bear," he said.