US to impose 50pc tariffs on most Canadian goods

In short: Donald Trump has imposed 50 per cent tariffs on most Canadian goods, declaring that Canada has unfairly discriminated against American autos, alcohol and dairy products. An administration official says Canada was one of the only nations other than China that retaliated against previous tariffs and must be held accountable. What's next? The White House said the tariffs would go into effect in 30 days, meaning there is time for negotiations. US President Donald Trump has imposed 50 per cent tariffs on most Canadian goods, declaring that Canada has unfairly discriminated against American vehicles, alcohol and dairy products. The move could unleash a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Mr Trump's return to the White House. The administration official previewing the action said Canada was one of the only nations other than China that retaliated against Mr Trump's previous tariffs and must be held accountable. The official insisted on anonymity on a call with reporters to preview the president's actions and said Mr Trump signed three proclamations to launch the tariffs under Section 338 of the 1930 Trade Act. Several Democratic politicians last year proposed repealing the section because they said Mr Trump could use it to destabilise the economy. The new 50 per cent tariffs would exclude energy products, potash, fish and critical minerals, but they would include goods that had previously been protected from import taxes by the United States-Mexico-Canada Agreement, or USMCA. That 2020 trade pact was not renewed by the US, triggering a new set of negotiations that could run until 2036. The White House said in a fact sheet the tariffs would go into effect in 30 days, meaning there is time for negotiations as Mr Trump has not always followed through on his announced tax hikes on imports. Canada faces the risk of a broader trade war Still, the tariffs could escalate into a wider trade war as Canada seeks to defend its economy. The Canadian federal government did not immediately comment on the tariff, but Ontario Premier Doug Ford saw a possible showdown ahead. "If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar," Mr Ford posted on social media. Candace Laing, CEO of the Canadian Chamber of Commerce, said the Trump administration's moves were "regrettable" but the two countries needed to use the 30-day window "to make meaningful progress in advancing formal talks". Chris Swonger, CEO of the Distilled Spirits Council of the United States, also called for a deal: "We encourage policymakers on both sides of the border to pursue a negotiated solution that restores market access for US spirits and avoids further harm to the US hospitality sector." But the use of a Great Depression-era law to impose the tariffs broadens some of the risks, as those tariffs could be applied to other US trading partners, not just Canada, and inject "massive uncertainty" into the global economy, said Scott Lincicome, vice-president of general economics at the Cato Institute, a libertarian think tank. "We crossed the Rubicon," Mr Lincicome said. "The invocation of 338 is the nuclear option for Trump tariffs." Tariffs are also a political challenge for Trump The new tariffs carry serious political and economic risks for Mr Trump ahead of the November midterm elections for control of Congress. His Liberation Day tariffs last year provoked a financial market meltdown over concerns about inflation and a recession, prompting him to walk back the rates for a period of negotiation. The Supreme Court ruled this February that Mr Trump had lacked the legal authority to impose the tariffs by declaring an economic emergency, causing the administration to find alternative ways to raise import taxes based on a series of legal authorities. The president maintains the costs created by tariffs will cause manufacturing to relocate to the US, though there is little evidence of that in the economic data. These tariffs extended to Australia, where the Trump administration imposed a 10 per cent import surcharge on most goods imported to the US. The Trump administration is also looking into additional tariffs on Canada because its wildfires hurt air quality in the US. Mr Trump had publicly threatened to do so in social media posts. AP [Image text:] We are no longer selling liquor from the USA Ask us about some great local and Canadian alternatives 19 LIQUOR MART gandh