Trump’s New 50% Tariffs on Canada: Could They Escalate Into a Trade War?

President Donald Trump signed a proclamation on July 20 ordering the imposition of 50% tariffs on certain Canadian products under a legal provision that has never before been used.

According to a senior Trump administration official, the new tariffs will take effect in 30 days. Certain key imports—including energy, potash, fish, critical minerals, and products already subject to sector-specific tariffs in industries such as automotive manufacturing and metals—will be exempt. However, according to the official, there will be no exemptions for products covered under the current North American trade agreement between the United States, Canada, and Mexico.

The new tariffs would be imposed under Section 338 of the Tariff Act of 1930, which grants the president the authority to impose tariffs of up to 50% on countries deemed to discriminate against U.S. trade. The administration argued that Ottawa had treated U.S. alcoholic beverages, automobiles, and dairy products unfairly.

The provision has never before been used to impose tariffs, adding further strain to trade relations between the two countries.

Canada Responds to Tariffs by Canceling Joint Gordie Howe International Bridge Opening Ceremony

In response to Trump’s announcement, Canada has canceled the joint ceremony with the United States that had been scheduled for Friday, July 25, to celebrate the opening of the Gordie Howe International Bridge, which connects Detroit with Windsor, Ontario.

“In light of the trade measures the United States threatened earlier this week, it would not be appropriate to move forward with a joint celebratory event between our two countries,” Jenna Ghassabeh, spokesperson for Canadian Infrastructure Minister Gregor Robertson, said in a statement sent by email.

Canada’s decision applies only to the opening ceremony. The bridge is still scheduled to officially open on July 27, but the ceremony will no longer include a U.S. delegation. “We remain committed to opening the bridge on July 27 and to celebrating this milestone with Canadians on July 24,“ Ghassabeh said.

The opening of the 1.5-mile bridge spanning the Detroit River and linking Detroit with Windsor had originally been scheduled for June 12. The date was postponed after officials said the United States and Canada were still working to resolve several outstanding issues.

Under the project’s financing agreement, Canada assumed responsibility for construction and will recover the cost through toll revenue. The Trump administration had sought changes to that arrangement.

In February, Trump called in a social media post for Canada to transfer at least half ownership of the bridge to the U.S. government and to accept other unspecified demands. Construction on the project began in 2018, and its cost has reached nearly $4.4 billion.

Regarding the tariffs, Canadian Prime Minister Mark Carney said in a statement that his government remains willing to negotiate with the Trump administration. “If these tariffs move forward, Canada should respond tariff for tariff, dollar for dollar,“ Ontario Premier Doug Ford wrote on social media.

The tariffs could escalate into a broader trade war as Canada considers how to respond.