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Dramatic ramp up in tariff size, scope set to take effect in 30 days
U.S. President Donald Trump has signed an executive order that will impose tariffs of 50 per cent on a wide range of Canadian exports, a dramatic ramping up of his trade war against his northern neighbour.
The 50 per cent rate is being imposed in response to what a senior administration official described as Canada’s retaliation against U.S. trade policy and its discrimination against U.S. motor vehicles, dairy and alcohol.
“This is not a trade war with Canada, these are defensive measures,” the official said in a conference call with reporters Monday afternoon.
The new rate is set to take effect in 30 days.
While energy, potash, critical minerals and fish would be exempt, other products that until now have been allowed into the U.S. tariff-free under terms of the Canada-United States-Mexico Agreement (CUSMA) would be hit.
The 50 per cent tariff is five times higher than the current duty imposed on the small portion of Canada’s exports to the U.S. that don’t comply with CUSMA’s rules of origin regulations.
‘Wine to hockey sticks to cement’
The new rate would apply to a variety of Canadian imports, “ranging from wine to hockey sticks to cement,” the official said, adding that the White House will publish a full list of the affected products.
“By doing this, President Trump is levelling the playing field for crucial American exports,” said the official.
The tariffs are imposed under Section 338 of the U.S. Tariff Act, which gives the president the power to impose a maximum tariff of 50 per cent on imports from countries that are deemed to discriminate against U.S. industry.
Although section 338 “has been on the books for a long time,” the official said it has not been used for this purpose before, which implies the action could face a legal challenge.
“In situations of retaliation like this, it fits squarely with what the statute allows,” the official said. “It gives the president this authority in situations where a country discriminates against the United States relative to the treatment it gives a third country.”
“President Trump is taking action to hold Canada accountable for its continued discrimination against and unreasonable and unequal treatment of U.S. commerce that has burdened and disadvantaged hardworking Americans,” said a statement from the White House.
The sharp increase in tariffs comes amid stalled negotiations between Canada and the U.S. over amendments to CUSMA.
Meanwhile, U.S. Trade Representative Jamieson Greer is to travel to Mexico this week for talks.
Trump took “decisive action to hold Canada accountable for its retaliation and discrimination,” Greer said in a news release Monday. — Mike Crawley
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Credit belongs to: www.cbc.ca
