The tariffs, which take effect in 30 days on Aug. 19, aggravate trade tensions between the two traditional allies and threaten higher inflation as the war in Iran continues to eat at American pockets.
The Administration also imposed tariffs on Canadian dairy products: Trump highlighted in his proclamation that Canada “denies to the United States the favorable treatment that Canada provides to the EU and its member States” for cheese products. It also hiked duties on Canadian exports of wine and other alcoholic beverages, with Trump citing Canadian provinces’ halt in purchasing American alcoholic beverages since March 2025, though some provinces have since lifted the ban on U.S. alcoholic goods.
The Office of the U.S. Trade Representative said Trump’s proclamations cover nearly $20 billion in imports from Canada, or about 5.2% of the almost $382 billion worth of goods that the U.S. imported from Canada in 2025. But the latest tariffs will not apply to energy, potash, products subject to tariffs under Section 232 of the Trade Expansion Act of 1962, and certain other goods, such as fish or critical minerals.
“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,” said U.S. Trade Representative Jamieson Greer in a statement.
But with 30 days before the proclamations take effect, there’s plenty of time for the U.S.’s second-largest goods trading partner to negotiate. Trump has historically used threats of tariffs on target countries to reach agreements with them and advance his foreign policy agenda, despite several studies finding that American consumers bear the brunt of the economic costs of such levies when they do go in place.
The challenge of a new tariff regime
Following the February Supreme Court ruling that struck down most of Trump’s tariffs citing a lack of legal authority in using emergency powers, the Trump Administration has been actively seeking alternative ways to raise import taxes through other legal instruments.
Section 338, in particular, allows the President to impose a duty of up to 50% on a country’s goods to “offset commercial disadvantages” if it factually finds that said country “discriminates” against U.S. commerce.
But Trump is veering away from the statute’s principle in a “maximalist” way, Veroneau said: “These tariffs may be lawful under Section 338, but they at a minimum violate the spirit of Section 338, which was to create a world where countries apply the same tariffs on the same goods to all countries.”
Some observers say the use of Section 338 is expected to face legal challenges, just like Trump’s previous court-dismissed tariffs.
“Yet another absurd and harmful escalation in Trump's idiotic trade war with our close friend and ally,” Sen. Patty Murray (D, Wash.) posted on social media. “Trump's tariffs continue to hurt Americans AND Canadians alike.”
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