Trump slaps additional 50% tariffs on Canadian goods over auto, dairy, alcohol disputes

US President Donald Trump on Monday imposed an additional 50% tariff on a range of Canadian imports, accusing Ottawa of discriminating against American exports of automobiles, alcohol and dairy products.

The White House said the tariffs, imposed under Section 338 of the US Tariff Act of 1930, would take effect 30 days after signing and are intended to offset what it described as the burden on US commerce from Canada's trade practices.

Several Democratic lawmakers last year proposed repealing Section 338 of the Act because they feared Trump could use it to destabilise the economy.

The tariffs will apply regardless of whether the products qualify for preferential treatment under the US-Mexico-Canada Agreement (USMCA).

The administration said the measures will not apply to energy products, potash, goods already subject to Section 232 tariffs, fish and certain critical minerals.

The move could trigger higher inflation and further fraying of relations between two nations that had been closely woven together before Trump's return to the White House.

The White House accused Canada of unfairly disadvantaging US exports in the automobile, alcohol and dairy sectors.

It said Canada maintains tariffs and quotas on US vehicle imports that are not imposed on some other countries and administers those quotas in ways that encourage American automakers to shift production to Canada.

The administration also criticised restrictions by most Canadian provinces on US alcoholic beverages and described Canada's dairy import quota system as more restrictive toward US cheese than similar imports from the European Union.

The White House said Canadian imports of US motor vehicles fell by about USD 5.6 billion, or 22%, between April 2025 and March 2026 compared with the previous 12-month period. It also said imports of US alcoholic beverages declined by about USD 582 million, or 81%, over a similar period.

The administration argued the tariffs are intended to offset the burden on US commerce caused by Canada's trade practices and restore reciprocal treatment for American exporters.

The White House also said Trump had decided not to renew the USMCA in its current form, saying the agreement was not sufficiently beneficial to the United States.

Canadian Prime Minister Mark Carney said the latest tariffs were part of a series of unilateral US trade actions that began with measures imposed "in direct violation" of the USMCA.

He said Canada had put forward detailed proposals to resolve the dispute and modernise USMCA, and remained ready to intensify discussions with Washington in the coming weeks.

"Canada believes in the benefits of free and fair trade," Carney said, adding that the dispute had increased costs for families, particularly in the United States.

He said Canada would continue taking whatever measures were necessary to support Canadian workers, farmers, businesses and families while engaging with the US to resolve outstanding issues.