US–Canada Trade War Escalates with New 50% Tariffs

US President Donald Trump has signed an executive order imposing additional 50% customs tariffs on a range of Canadian products, effective in one month, citing "discriminatory treatment against American products by Canada" and bilateral disputes in the automotive, dairy, and alcoholic beverage sectors.

Goods Affected and Key Strategic Exemptions

The new tariffs will apply to a wide variety of goods, ranging from wines to hockey sticks and cement. Notably, they also affect certain products imported into the US under its free trade agreement with Canada and Mexico.

However, key sectors such as energy, potash, seafood, and rare earth elements are explicitly exempt from the new additional tariffs.

Ongoing Disputes Over Dairy and Alcohol Imports

Access for US dairy products to the Canadian market has been a subject of dispute under the Canada–US–Mexico free trade agreement, with Washington accusing Ottawa of defaulting on its commitments.

However, a ruling by an arbitration panel provided under the agreement sided with Canada in late 2023, after Ottawa intentionally restricted the tariff-rate quota on US milk and dairy products.

The US administration repeatedly initiated procedures under the agreement without changing the outcome. Added to this dispute is the boycott of US alcoholic beverages by almost all Canadian provinces.

"Unlike other partners and allies, Canada continues to enforce retaliatory measures against the US for its efforts to rebalance trade," argued Jamieson Greer, the White House Trade Representative (USTR), in a press release issued by his office on Friday.

"Canada is removing American alcoholic products from shelves, granting better access to European dairy products, and placing a cap on imports of American cars into Canada from companies that have relocated their headquarters back to the US," he continued, stressing that the order will allow "Canada to be held accountable."

Persistent Trade Conflicts and Legal Setbacks

In most Canadian provinces, public institutions handle the distribution of alcoholic beverages. Many of them decided to stop purchasing US products when Donald Trump imposed the first round of 25% tariffs against Canada upon returning to the White House in 2025.

At the time, the Republican president accused the northern neighbor, as well as Mexico, of failing to effectively fight against fentanyl trafficking and migration to the US.

He had nevertheless ensured that tariffs did not apply to goods imported under the trilateral free trade agreement, which accounted for 80% of Canadian exports to the US, according to Ottawa's figures.

However, those tariffs were struck down in late February by a decision of the US Supreme Court, along with all non-sectoral tariffs imposed by the White House: the highest body of American justice ruled that the president exceeded his authority.

New Tariff Waves and Wildfire Threats

Since then, Donald Trump has been seeking ways to reinstate the invalidated tariffs and initially imposed a temporary 10% general tariff on all imports.

As those temporary tariffs expire on Friday, the White House is expected to announce a new series of tariffs, following investigations into the trade practices of around 60 countries, including top US trading partners, launched to justify their implementation.

Brazil became the first target of these new US customs tariffs last Thursday, facing 25% levies on specific export categories to the US market, coming into force this Wednesday.

On Friday, Donald Trump also raised the threat of imposing additional tariffs due to smoke from hundreds of wildfires in Canada that dramatically worsened air quality in major northeastern US cities. He accused Ottawa of "deliberate negligence," claiming it does not know how to "properly manage" its forests.

Source: ink.com