U.S. President Donald Trump has altered the scope of the 50% tariffs on a variety of Canadian imports, removing some products from the list of goods subject to the levies while adding others. The new moves are the latest in the ongoing trade dispute between Ottawa and Washington.
Trump signed a proclamation Friday, October 23, to exempt some products from the additional tariffs starting October 30. The exemptions include some industrial machinery, some packaging and paper materials, and plywood. At the same time, tariff measures will newly cover products including carpets and air conditioners and cocoa powder.
The duties were imposed under Section 338 of the Trade Act of 1930, which allows the U.S. president to impose tariffs of up to 50 percent in retaliation for what it says is discrimination against American commerce. Trump invoked the law in August after trade talks between the two countries fell apart.
At the time, the administration said Canada was unfairly applying duties and quotas on U.S. imports of automobiles. Washington also cited Canada’s suspension of purchases of imported alcohol and its imposition of tariff-rate quotas on some dairy products as a basis for the measures.
In the most recent proclamation, Trump said senior executive branch officials had recommended that changing the list of affected goods would still counter the alleged discriminatory practices and be in the public interest. So the administration has changed the products covered by the duties, but not the broader tariff structure.
The dispute has been brewing for months. Trump first imposed the 50% tariffs in July when the measures covered about $20 billion in Canadian imports. The announcement was followed by a month of trade talks, but talks collapsed in mid-August when Canadian Prime Minister Mark Carney called them off. Then the tariffs came into force.
Canada retaliated in September by imposing tariffs of up to 50% on U.S. imports, matching the level of Washington’s tariffs. Trump then broadened the trade conflict, escalating it by broadening the scope of the tariffs and adding import bans on products including specialty cheeses, boats and furniture.
The latest tweaks come as a separate legal challenge is brought against the administration’s use of Section 338. A lawsuit to reverse the tariffs was filed this week with the U.S. Court of International Trade.
The Liberty Justice Center filed the lawsuit on behalf of food importer Gellert Global Group. The plaintiffs contended that the administration did not meet the statutory requirements for imposing the duties. They also wonder whether Trump’s use of Section 338 is warranted in light of more recent legislation.
In addition to seeking the removal of the tariffs, the plaintiffs have asked the court to stop collecting the tariffs and refund importers that have already paid the duties.
The tariff dispute continues to create uncertainty for companies moving goods between the United States and Canada as the October 30 changes approach. Some products will be excluded, but the arrival of other imports means the net impact on cross-border trade will depend on the products themselves and the outcomes of ongoing court cases.
