President Donald Trump’s new 50% tariffs on some Canadian goods have taken effect. The tariffs began at 12:01 a.m. ET on Saturday. The move followed the collapse of last-minute trade talks between the United States and Canada. The new duties affect products ranging from hockey sticks to wine. However, key Canadian exports such as oil, gas and potash remain exempt. Canadian Prime Minister Mark Carney said the tariffs will affect about $28 billion in Canadian goods.
Canada has also promised a strong response. Carney said Ottawa would match the U.S. tariffs “dollar for dollar.” He blamed “last-minute changes” to Washington’s proposed deal. According to Carney, those changes were “unfair” and “uneconomic.” Meanwhile, U.S. Trade Representative Jamieson Greer blamed Canada for rejecting the deal. He said Canada made “new demands” and reversed some earlier commitments.
The latest dispute comes after weeks of back-and-forth negotiations. Earlier this week, Trump said he had reached a preliminary deal with Canada. He also praised a “very good conversation” with Carney. Trump claimed Canadian tariffs on American farm products could fall to zero. The proposed deal was also expected to cover market access, digital trade and economic security. Trump even suggested reviving the controversial Keystone XL pipeline.
Still, the new tariffs could raise costs for businesses and consumers. Affected Canadian products include dairy items, honey, whey protein and molasses. Alcoholic drinks such as whiskey and vodka are also included. Unlike earlier measures, these tariffs can hit goods covered by the USMCA trade agreement.
The U.S. is using Section 338 of the 1930 Tariff Act. That law allows tariffs of up to 50% against countries accused of unfair trade practices. Economist Abigail Watt said the provision has never been used before. That makes the latest move unusual and legally uncertain.
