Trump Hits Canada With 50% Tariffs Under Dormant 1930 Law

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President Donald Trump signed three proclamations Monday imposing a 50% tariff on a broad slate of Canadian imports, reaching for a never-before-invoked provision of the 1930 Smoot-Hawley Tariff Act to escalate a trade fight that has now consumed most of his second term.

The White House invoked Section 338 of the Tariff Act of 1930, which permits the president to impose duties of up to 50% on countries found to discriminate against U.S. commerce.

The administration says its proclamations target Canadian treatment of American autos, alcohol, and dairy, and Axios reported the duties will hit roughly $20 billion in Canadian goods.

The new tariffs take effect at 12:01 a.m. EDT on Aug. 19, 30 days after signing, and cover products ranging from wine and hockey sticks to cement, furniture, paper, and plywood.

Unlike prior rounds, they apply even to goods that qualify for duty-free treatment under the U.S.-Mexico-Canada Agreement.

Energy, potash, fish, critical minerals, and items already covered by Section 232 duties, including passenger vehicles, steel, and aluminum, are excluded.

Reuters could find no record of Section 338 having been used before, and one former U.S. trade official who studied the statute told the wire service that the move "may be lawful" but violates the provision's spirit.

Legal scholars are signaling a fight.

Peter Harrell of Georgetown Law argued the administration bypassed required procedures, and Ilya Somin, who helped defeat Trump's earlier emergency-powers tariffs, contended that Congress "superseded" Section 338 through later trade legislation.

The administration is reaching for the dormant authority as its other tariff tools erode.

A federal trade court earlier struck down Trump's 10% global tariff imposed under Section 122, another rarely used statute, though an appeals court allowed the duties to remain pending review.

That authority expires Friday. U.S. Trade Representative Jamieson Greer told CNBC on Tuesday to "expect to see some action soon" from a Section 301 forced-labor investigation expected to produce tariffs on dozens of countries.

Canadian Prime Minister Mark Carney called the move a "direct violation" of the trade pact and said Canada is prepared to intensify talks in the coming weeks.

He warned Tuesday that "all options" remain open if the tariffs proceed. Ontario Premier Doug Ford urged Ottawa to hit back "tariff for tariff, dollar for dollar."

The 30-day window leaves room for a deal.

A senior administration official said the White House remains open to negotiations and said separate "wildfire tariffs" Trump has threatened remain under consideration, though the legal basis for those has not been identified.

Jim Thomas

Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.

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