- U.S. President Donald Trump imposed new 50 per cent tariffs on Canadian exports using Section 338 of the U.S. Tariff Act of 1930, a law never used before.
- The tariffs are likely to be challenged in U.S. court by an importer, but trade law experts say a successful challenge is uncertain because the law explicitly allows tariffs for discrimination.
- Experts say Trump is on more solid legal ground than with previous tariffs, citing Section 338's focus on 'discrimination by foreign countries' that places U.S. commerce at a disadvantage.
- Canada's alleged discriminatory actions include banning U.S. alcohol in eight provinces, limiting dairy access, and capping vehicle exports, as outlined in Trump's proclamations.
- The 50 per cent tariffs are set to take effect on Aug. 19, but some analysts view them as a negotiating tactic to gain leverage.
- Former deputy U.S. trade representative John Veroneau notes Section 338 has fewer limitations and expects a challenge if tariffs take effect.
- Queen's University professor Nicolas Lamp says importers may not challenge the tariffs because it would be a waste of money given the negotiating context.
President Trump is imposing a 50% tariff on Canadian exports under Section 338 of the U.S. Tariff Act of 1930, a law not previously utilized. This unprecedented move targets Canada for allegedly discriminating against U.S. trade, particularly in alcohol, dairy, and vehicle exports.1267
Trump's proclamations assert that Canada is disadvantaging U.S. commerce by:
- Banning U.S. alcohol products in eight provinces.
- Limiting access for U.S. dairy products.
- Capping U.S. vehicle exports.
Experts suggest that while a court challenge is likely, the legal framework may favor Trump. John Veroneau, a former deputy U.S. trade representative, noted that Section 338 has fewer limitations than other tariff laws, indicating that Trump might be on solid legal ground.1112
Nicolas Lamp, an associate professor at Queen's University, believes the tariffs serve as a negotiating tactic to weaken Canada's position in trade discussions. He remarked, “Any importer who might think about challenging them will probably not want to waste their money.”9101314
The tariffs are set to take effect on August 19, raising questions about their potential impact on U.S.-Canada trade relations and the likelihood of legal disputes.
As the situation unfolds, the implications of these tariffs could reshape the dynamics of North American trade.
“Trump told Canadian PM Carney that the US had been 'invaded' by 'filthy' air from Canada and suggested Canada should 'pay some damages' or face tariffs. The 50% tariffs, based on Section 338, are set to take effect Aug. 19 and are seen by some analysts as a negotiating ploy.”
The Guardian
