Trump Hits Canada and Others With Still More Tariffs

As negotiations among the U.S., Canada, and Mexico continue over the review and renewal of the Canada-U.S.-Mexico Agreement (CUSMA), U.S. President Donald Trump has ratcheted up his aggressive tariff threats against Canada and other countries. This follows his usual ‘Art of the Deal’ strategy, which is to create chaos, threaten harm, extract concessions (often marginal), and then claim historic victory.

Two sets of new tariffs have been announced in the last week:

Under Section 388 of U.S. trade law, Trump announced punitive 50% tariffs against over 500 different products from Canada, supposedly in response to ‘discriminatory’ treatment of U.S.-made autos, liquor, and dairy products. His complaints about discriminatory treatment are laughable, since these so-called ‘irritants’ were counter-measures imposed against Trump’s unilateral escalation of tariffs against Canada last year. The tariffs will come into effect August 19, unless some new trade deal between the two countries is reached by then. The products covered by these tariffs constitute about 4-5% of Canada’s exports to the U.S., and there will be no exemption for products qualifying under the existing CUSMA. This will cause an incremental increase in overall weighted-average tariffs on Canadian products. The regional impact of the tariffs is quite diverse: exports from B.C., Ontario,, and Quebec are hit hardest, while exports from Alberta, Saskatchewan, and Newfoundland & Labrador (concentrated in energy and potash, two products which the U.S. desperately needs). Given U.S. interference in the debate over Alberta separatism, many analysts suspect this regional differentiation is quite deliberate, intended to further inflame tensions between the provinces in how to respond to the U.S. attacks.
Days later, under Section 301 of U.S. trade law, Trump announced new across-the-board tariffs against some 80 countries, including Canada and all other top U.S. trading partners, supposedly to combat the use of forced labour in production of traded products. The affected countries supposedly have not taken adequate measures to prevent use of products made with forced labour in their own supply chains, thus indirectly facilitating the continuation of forced labour. Coming from the country which has by far the weakest protections for labour standards (including the use of prison labour in for-profit companies), this is not believable. In reality, Trump seized on this measure to justify reimposition of the across-the-board ‘Liberation Day’ tariffs that were struck down by the U.S. Supreme Court earlier this year.

In online commentary, Centre for Future Work Director Jim Stanford highlighted the hypocrisy of the U.S. invoking fake concern over labour freedoms to justify these new Section 301 trade attacks:

“The U.S. uses prison labour (incl. for private firms) more than any other country, hasn’t raised its min. wage ($7.25/hr) since 2009, and violates dozens of international labour standards every day. So Trump’s new Section 301 tariffs have nothing to do with concern for labour. They are a laughably transparent effort to replace the Liberation Day tariffs struck down by his own (stacked ) Supreme Court. They apply to all of the U.S.’s top trading partners–INCLUDING those who signed ‘deals’ with him, and those with whom the U.S. runs trade SURPLUSES. So if misery loves company, Canada should feel better. These new tariffs will hurt other U.S. trading partners as badly as the new Section 338 tariffs he announced this week will hurt Canada. But the biggest loser from this entire clown show is the U.S. Inflation, manufacturing job loss, declining real incomes, and general uncertainty will get worse. His war in the Persian Gulf is still going badly. And his mid-term prospects are grimmer than ever (hence his trying to rekindle trade wars).”

Stanford also appeared on CBC News Network’s show Ian Hanomansing Tonight to discuss the new tariffs, and how Canada should respond. He pointed out that at least 80 of the products targeted by Trump’s new Section 388 tariffs against Canada are items that Canada does not export to the U.S. They are thus ‘tariffs on nothing’, reinforcing that the threats are mostly about the theatre of negotiations more than any genuine economic goals. These ‘tariffs on nothing’ are the equivalent for Canada of the ridiculous ‘Liberation Day’ tariffs that Trump imposed in April 2025 on over 100 countries around the world – including uninhabited Antarctic islands!

Stanford also warned that even if Canada reaches a new trade deal with the U.S., we can have no confidence that he would live up to its terms. After all, many of the so-called ‘deals’ which Trump reached with various countries in the last year have been reneged on, or superseded by his new tariffs (such as the new Section 301 tariffs, which apply to all top trading partners of the U.S. – including those, like Australia, with which the U.S. runs trade surpluses). The CUSMA itself we negotiated by Trump himself during his first term, and lauded by him at the time as the greatest trade deal in history, yet he has violated its terms without hesitation in his second term. And U.S. demands to rewrite the contractual terms of the Gordie Howe Bridge (paid for my Canada under an agreement with the U.S. signed ) is further proof that any ‘deal’ with the U.S. is very fragile.

Given the unreliability of U.S. commitments on any trade issue, therefore, it is all the more important for Canadian negotiators to proceed with caution in negotiations around a revised trade deal. Complaints that Canada has not reached a quick deal with the U.S. are misplaced. Other countries which hoped they could avoid the impacts of Trump’s tariffs by giving up concessions in a ‘deal’ (like the EU, Japan, the UK, or India) have been victimized by subsequent U.S. trade actions as badly (or worse) than Canada. As our Centre argued a year ago (in the research paper, A Bad Deal with Trump is Worse then No Deal at All), Canada’s negotiators need to hold firm on the requirement that U.S. tariffs (especially the targeted sectoral tariffs that are traumatizing key industries like auto, steel, and forestry) are removed as part of any comprehensive deal.