A dormant clause of a nearly century-old trade statute is now the foundation of Washington’s latest escalation against its northern neighbour, with President Donald Trump reaching for a legal tool that has never before been deployed in this way.
Trump signed three proclamations on Monday imposing 50% tariffs on a broad range of Canadian goods, invoking Section 338 of the Tariff Act of 1930. The provision permits a president to levy duties of up to 50% without congressional approval when a country is deemed to be discriminating against American products. The measures cover roughly $20 billion worth of Canadian imports and take effect in 30 days.
The affected products stretch from electrical equipment such as refrigeration to machinery and a long list of dairy items including various milks and creams, whey and lactose. Energy products, critical minerals, potash and fish are excluded, as are goods already subject to industry-specific duties such as cars and metals.
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The administration framed the levies as a countermeasure rather than an opening salvo. A senior White House official described them as “defensive measures” on a call with reporters, arguing they respond to Canada’s retaliation against past US trade policy and to alleged discrimination against American motor vehicles, alcohol and dairy.
Echoing that reasoning, U.S. Trade Representative Jamieson Greer said in a statement that the tariffs were intended to counter what he called Canada’s retaliation and discrimination against American exports. “While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors,” he said.
Much of the White House’s case rests on Canadian actions that were themselves responses to earlier US measures. The autos proclamation points to the 25% tariff that Canada began levying in April 2025 on US motor vehicles not qualifying for preferential treatment under CUSMA.
Where alcohol is concerned, the administration noted that all but two provinces and territories stopped buying and selling American alcoholic beverages last year, a step taken after Trump’s tariffs and his repeated suggestions of making Canada the 51st state. The dairy complaint centres on Canada’s tariff rate quota system, which the proclamations claim favours European cheese over American producers.
Unlike previous rounds, the new tariffs offer no carve-outs for goods covered by the Canada-U.S.-Mexico Agreement, which remains under negotiation.
Ontario Premier Doug Ford, already among the louder voices calling for a firmer stance, urged an immediate response.
The timing suggests the levies may function partly as leverage, giving Canada a month to reconsider what the White House labels discriminatory treatment before the duties land.
The move also arrives days after Trump threatened separate tariffs over wildfire smoke drifting south across the border, a complaint he raised with Prime Minister Mark Carney while the two watched Sunday’s World Cup final. Officials said Monday’s action is unrelated, adding that the president has asked aides to examine additional measures tied to air quality. “The president has other options on that,” an official said.
