Welcome back to This Week in Canada, where we insist that everyone else makes trade concessions—just as long as we don’t have to; the protection of dairy cartels is called patriotism; and bourbon is causing an international incident. Let’s jump in!
If you’ve lost track of where Canada and the United States stand on tariffs, don’t worry. So has everyone else. In the past 18 months we’ve had tariffs, retaliatory tariffs, paused tariffs, resumed tariffs, exempted tariffs, canceled trade talks, resumed trade talks, court rulings, appeals, and 51st-state taunts. Blink and you probably missed a tariff. If you’re a glutton for punishment, here’s a useful timeline.
And that just scratches the surface. After the Supreme Court struck down the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, the White House scrambled for new legal authority—first relying on Section 122 of the Trade Act of 1974, a little-used emergency provision allowing temporary import surcharges for up to 150 days.
The resulting 10 percent tariff took effect on February 24, but because most goods that complied with the United States-Mexico-Canada Agreement (USMCA) were exempt, the measure fell far more heavily on imports from countries outside North America than on Canadian exports.
Last week, with the temporary surcharges about to expire, the White House announced that it was pivoting to Section 338 of the Tariff Act of 1930, a provision that had never before been used in the modern era. Unlike Section 122, Section 338 is aimed directly at Canada, with 50 percent tariffs on “products ranging from wine to hockey sticks to cement,” as the White House put it in a “fact sheet” that cited “continued discrimination against and unreasonable and unequal treatment of U.S. commerce that has burdened and disadvantaged hardworking Americans.”
According to the White House, that discrimination largely comes from Canada’s supply management system, which protects Canadian dairy farmers with production quotas and high import tariffs, a 2025 retaliatory surtax on U.S. automobiles, and provincial liquor monopolies that removed or restricted the sale of American beer, wine, and spirits during the trade dispute. As if that weren’t enough, Canada also is one of the 60 countries hit last week with separate Section 301 tariffs of 10 percent on imports. The countries were accused of inadequately enforcing laws against the use of forced labor, giving those countries an unfair advantage over the U.S.
