WASHINGTON: The Trump administration has vowed to impose a fresh 50% tariff on some Canadian goods over what it says is unfair treatment of American alcohol, cars and dairy, further inflaming trade tensions between the two neighbours.
The items subject to the new tariff include milk and cream, hockey equipment and alcohol, but not major resource imports including energy, potash, fish and critical minerals.
Goods covered by separate duties on industries, including autos and steel, will also be spared, according to a US official who briefed reporters on the move.
Crucially, there will be no exemptions for products under the existing North American trade pact between the United States, Canada and Mexico, the official said.
The Canadian dollar dipped on the news to trade at C$1.4083 per US dollar.
If Trump followed through with the levies, which are set to take effect in 30 days, the move would mark one of the most severe trade actions he’s taken against the United States’ second-largest trading partner.
But Trump has made such threats before only to pull back after negotiations or because of market concerns. He signed a proclamation ordering the tariffs on Monday, the official said.
“I’m not going to react to that,” Canada Energy Minister Tim Hodgson said in an interview moments after the news was announced. “We’ve seen this sort of thing before.”
The tariffs are being applied under Section 338 of the 1930 Tariff Act, which gives the president the power to impose duties of as much as 50% from countries deemed to discriminate against US commerce.
The provision has never before been used to impose tariffs, according to the official.
Monday’s action threatens to further strain relations with Canadian Prime Minister Mark Carney, who joined Trump to view the World Cup final in New Jersey on Sunday.
Last week, Trump threatened higher tariffs to punish Canada for the wildfire smoke that blanketed US cities, including New York and Washington.
Further complicating the trade relationship, the United States earlier this month declined to extend its trade agreement, known as USMCA, with Canada and Mexico, setting up what could be years of contentious negotiations.
In January, Trump threatened a 100% tariff on Canadian goods and services if Canada struck a trade deal with China. Nothing came of that threat.
The US action on Monday dates back in part to a decision by some Canadian provinces to pull US liquor and other products from the shelves in response to tariffs Trump imposed last year, around the time he repeatedly said Canada should become the 51st state.
“Specifically, Canada has taken US alcohol products off Canadian shelves, given better market access to dairy products from the European Union, and has put a cap on US vehicle exports to Canada from companies reshoring to the United States,” US Trade Representative Jamieson Greer said in a statement.
The senior administration official said the United States was still exploring options linked to Trump’s threat but that Monday’s action was unrelated to wildfires.
For some of the products subject to the new tariff, Canadian exports to the United States are not a significant part of overall bilateral trade.
For example, Canada exported only C$391mil of dairy products to the United States last year, according to Canadian government data.
Exports of beer, wine and spirits to the United States totalled US$1.9bil in 2025, according to US trade data.
The two countries did almost US$900bil of trade in goods and services last year.
Since Trump returned to office last year, the president and his officials have pushed Canada for concessions and sometimes received them. — Bloomberg
