President Trump Institutes New Tariff On Canadian Goods
Julia H · Jul 23, 2026 · 3 min read
Trade tensions between the United States and Canada rose sharply on Monday after President Donald Trump announced a 50 percent tariff on certain Canadian goods.
Trump signed the proclamations at the White House, arguing that Canada has continued to discriminate against American products. Although the new tariffs are not scheduled to take effect for 30 days, the announcement immediately added more strain to the already difficult relationship between the two countries.
Canadian Prime Minister Mark Carney responded in a statement posted Monday on X. Carney said the latest decision was part of a broader pattern of unilateral trade actions by the United States.
He accused the U.S. of imposing tariffs that violated the Canada-United States-Mexico Agreement, known in Canada as CUSMA and in the United States as the USMCA. The agreement governs trade among the three North American countries.
Carney argued that Canada had not acted aggressively, but had simply responded to measures already imposed by the Trump administration.
Canada, he said, had “merely matched those measures,” which he described as the country’s right under the circumstances.
The White House offered a very different account. In a statement released Monday, the administration accused Canada of maintaining quotas and trade restrictions that place American exporters at a disadvantage compared with businesses from other countries.
The statement specifically pointed to the automobile industry. According to the White House, Canada applies certain tariffs and quotas to vehicles imported from the United States while treating imports from some other countries more favorably.
The administration also claimed that Canada manages those quotas in a way that pressures American automakers to move production and investment north of the border rather than expanding manufacturing in the United States.
Trump imposed 50% tariffs on nearly $20 billion of Canadian imports, including dairy, wine and hockey gear, citing discriminatory treatment of US cars, alcohol and dairy goods, with the levies taking effect in 30 days https://t.co/jOkoAkst8F pic.twitter.com/RDU496Ic9S
— Reuters (@Reuters) July 21, 2026
To justify the new tariffs, Trump cited Section 338 of the Tariff Act of 1930. The law gives the president authority to impose tariffs when another country treats American exports less favorably than goods from other nations.
The White House said the provision allows the president to respond to discrimination that creates a burden on U.S. commerce.
Politico reported that Section 338 has never previously been used to impose tariffs in this way. That could make the administration’s action vulnerable to a court challenge.
Ryan Majerus, an international trade attorney and partner at the law firm King & Spalding, told Politico that the provision is broad but largely untested.
Majerus said he expects the tariffs to face a legal challenge. He also suggested the move may be intended to give the United States additional leverage during ongoing negotiations over the USMCA.
Monday’s announcement came only three days after Trump threatened Canada with additional tariffs over smoke from Canadian wildfires drifting into parts of the northern United States.
In a post on Truth Social, Trump accused Canadian officials of failing to carry out basic forest management and remove debris that could fuel fires. He described the situation as “willful negligence” and argued that the economic cost of the smoke should be reflected in the tariffs Canada pays.
Canadian officials have rejected that explanation and instead pointed to hotter, drier conditions.
Eleanor Olszewski, Canada’s minister for emergency management, said warmer and drier weather is increasing wildfire risks both in Canada and around the world. She noted that parts of northern Ontario and Quebec received less than 40 percent of their normal rainfall in June while also experiencing temperatures above historical averages.
Trump has long expressed skepticism about climate change policies, making the wildfire dispute another point of disagreement between his administration and Canadian leaders.